If a firm's average cost is equal to its average revenue, then
A) profit is at a maximum.
B) profit is at a minimum.
C) profit is equal to zero.
D) the firm is in equilibrium.

Question

Quizplus · Accepted Answer

When a firm's average cost is equal to its average revenue, it means that the firm is covering all its costs with its revenue, but it is not making any additional profit. Therefore, profit is equal to zero.

If a Firm's Average Cost Is Equal to Its Average