Question

The point on the supply curve at which a firm earns only normal profit is called ..........

• A. Break-even point
• B. Average Profit
• C. Long Run Average Cost
• D. Fixed Cost

Hint:

Normal profit = Zero economic profit. Break-even point is where TR = TC.

Answer 1

The Correct Option is A

Step 1: Recall the concept of normal profit.
Normal profit means revenue = cost (including opportunity cost). Profit = 0 (economic sense).
Step 2: Identify the point.
This occurs where total revenue = total cost, i.e., at the break-even point.
Step 3: Eliminate incorrect options.
- (B) Average profit → not the concept here.
- (C) LRAC → a curve, not a point of profit.
- (D) Fixed cost → irrelevant to profit condition.
Final Answer: \[ \boxed{\text{Break-even Point}} \]