Question

In a typical graph for a purely competitive firm, the intersection of the total cost and total revenue curves would be: select one:
a. a point of maximum economic profit
b. a point of minimum economic loss
c. a point where mr = mc
d. a break-even point

Answer 1

In a typical graph for a purely competitive firm, the intersection of the total cost and total revenue curves would be a break-even point. The break-even point (BEP) is the sales amount at which all costs associated with producing the product, fixed and variable are at an even point. No money is made but no money is lost either, the total profit amount is zero.