Discussion
The 'break-even point' is where
Answer: C
Correct answer: Total revenue equals total cost
At the break-even point the firm makes neither profit nor loss, so total revenue equals total cost:
\[ \text{Break-even quantity} = \frac{\text{Fixed cost}}{\text{Price} - \text{Variable cost per unit}} \]Marginal revenue equalling marginal cost is the condition for maximum profit, which is a different point entirely.
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