The point on the supply curve at which a firm earns only normal profit is called ______. |
Break-even point. Average Profit. Long Run Average Cost. Fixed Cost. |
Break-even point. |
The correct answer is Option (1) → Break-even point. The break-even point is the point on the supply curve (or cost-revenue graph) where a firm’s total revenue equals its total cost, meaning:
At this point, the firm is covering all of its explicit and implicit costs, and neither gains nor loses money. |