Question

The short-run break-even price A) is the price at which the firm's current liabilities are paid off. B) is the price at which a firm's total revenues equal total costs. C) occurs at the output at which the firm yields a below normal rate of return. D) occurs at the output at which the firm yields a positive economic profit.

Answer 1

Answer:

B. is the price at which a firm's total revenues equal total costs

Explanation:

The short run in economics is a period of time in which one factor of production is fixed and others are varied. In the short run, the market is not fully in equilibrium. Break even is the point in which the total cost used in the course of production is equal to the total revenue earned from the products produced. In a break even scenario, there is no profit and there is no loss. At this point, firms are making normal rate of return on money invested and are able to settle all cost of production.