Break-Even+Point

=BreakEvenPoint=

The Break Even Point is the point where economic profit is zero. That means that the total revenue is equal to all of the explicit costs + all of the implicit costs. Economic is any abnormal or excess profit. In the short run firms try to operate at or above the break even point. If a firm is operating at the break even point that means that they are doing as good doing this as if they were doing anything else in the world. Firms in long run pure competition will always be at the break even point because they are unable to make an economic profit. Monopolies are able to make economic profit, break even and make a loss in both the short and long run. Any economic profit is above the break-even point.



Where do monopolies make economic profit? Answer: above the break-even point