The condition for a firm to break-even in a perfectly competitive market is when price equals average total cost.

Here's why:

1. In a perfectly competitive market, firms are price takers, meaning they have no control over the price of the product they sell. The price is determined by the market.

2. The break-even point is the point at which total revenue equals total cost. At this point, the firm is not making a profit, but it is also not incurring a loss.

3. Total revenue is calculated by multiplying the price of the product by the quantity sold. Total cost is the sum of fixed and variable costs, which can be represented on a per unit basis as average total cost.

4. Therefore, for total revenue to equal total cost (i.e., for the firm to break-even), the price of the product must equal the average total cost.

So, the correct answer is "Price equals average total cost".

Question

The condition for a firm to break-even in a perfectly competitive market is when price equals average total cost.

Here's why:

1. In a perfectly competitive market, firms are price takers, meaning they have no control over the price of the product they sell. The price is determined by the market.

2. The break-even point is the point at which total revenue equals total cost. At this point, the firm is not making a profit, but it is also not incurring a loss.

3. Total revenue is calculated by multiplying the price of the product by the quantity sold. Total cost is the sum of fixed and variable costs, which can be represented on a per unit basis as average total cost.

4. Therefore, for total revenue to equal total cost (i.e., for the firm to break-even), the price of the product must equal the average total cost.

So, the correct answer is "Price equals average total cost".

Knowee AI · Accepted Answer

The condition for a firm to break-even in a perfectly competitive market is when price equals average total cost.

Here's why:

1. In a perfectly competitive market, firms are price takers, meaning they have no control over the price of the product they sell. The price is determined by the market.

2. The break-even point is the point at which total revenue equals total cost. At this point, the firm is not making a profit, but it is also not incurring a loss.

3. Total revenue is calculated by multiplying the price of the product by the quantity sold. Total cost is the sum of fixed and variable costs, which can be represented on a per unit basis as average total cost.

4. Therefore, for total revenue to equal total cost (i.e., for the firm to break-even), the price of the product must equal the average total cost.

So, the correct answer is "Price equals average total cost".

What is the condition for a firm to break-even in a perfectly competitive market?Price equals average variable costPrice equals marginal costPrice equals average total costPrice equals marginal revenue

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