A firm's "break-even point" is that point where:
A) maximum profit is earned.
B) total variable cost just equals total revenue.
C) the target return on investment is earned.
D) total cost just equals total revenue.
E) Both C and D are true.

Question

Quizplus · Accepted Answer

The break-even point is the level of sales where total revenue equals total cost. At this point, the firm is not making a profit or a loss, but is breaking even. If sales are below the break-even point, the firm is making a loss, while if sales are above the break-even point, the firm is making a profit.

A Firm's "Break-Even Point" Is That Point Where