For a firm to break even in the long run, the marginal cost curve must cut the

Assessment: JAMB UTME - Economics - 2005 Subject: Economics

Question 1 Report

For a firm to break even in the long run, the marginal cost curve must cut the

Answer Details
For a firm to break even in the long run, the total revenue should be equal to the total cost. At the break-even point, the firm is not making a profit nor a loss. The point where the marginal cost curve cuts the average cost curve at its lowest point represents the break-even point. This is because at this point, the marginal cost of producing each additional unit of output is equal to the average cost of production, and the total cost is minimized. Therefore, the correct answer is: "average cost curve at its lowest point".
Read lesson note on The Theory Of Production (JAMB)
Read lesson note on Theory Of Costs (JAMB)
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