If a firm is producing the level of output at which the total cost curve intersects the total revenue curve,
A)profit is positive
B)profit is maximized
C)profit is zero
D)costs are minimized
E)average revenue is maximized

Question

Quizplus · Accepted Answer

At the point of intersection between the total cost and total revenue curve, the firm is earning just enough revenue to cover all of its costs, including both fixed and variable costs. This point is also known as the breakeven point, and at this level of output, the firm is neither making a profit nor incurring a loss. Therefore, the correct answer is C, profit is zero.

If a Firm Is Producing the Level of Output at Which