Micro

Production & Costs

Easy

What does break even point indicate?

Total Revenue (TR) > Total Cost (TC)

Total Revenue (TR) < Total Cost (TC)

Total Revenue (TR) = Total Cost (TC)

Total Cost (TC) = 0

✅ Correct Option: 3

Option 1 -> This indicates profit situation where revenue exceeds cost.

Option 2 -> This indicates loss situation where cost exceeds revenue.

Option 3 -> This indicates break even point where revenue equals cost.

Option 4 -> This is not related to break even concept.

Hence, Option 3: Total Revenue (TR) = Total Cost (TC) -> The break even point is the level of sales or production at which total revenue exactly equals total costs, resulting in neither profit nor loss. At this point, the business covers all its fixed and variable costs but does not generate any profit. This is a critical metric for businesses to determine the minimum sales volume needed to avoid losses. -> correct

2025: 29 May Shift 2

In a production function $q = f(x_1, x_2)$ where the firm produces q output using $x_1$ of factor 1 and $x_2$ of factor 2. Now suppose the firm decides to increase the employment level of both the factors t (t > 1) times. then which among the following is correct?

2026: 11 May Shift 2

In the short run, Average Variable Cost curve is a U-shaped cost curve because of----------------.

2025: 13 May Shift 2

In which of the following conditions, output increases with the same proportion of input?

2025: 13 May Shift 1

In the long run __________.

2025: 22 May Shift 2

Which function tells us the relation between inputs and output?

2025: 28 May Shift 2

The total cost is equal to Rs.95 for 7 units of output and Rs.115 for 8 units of output. What is the marginal cost at the quantity of 8th unit?

What does break even point indicate?

Solution

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