#cfa #cfa-level-1 #economics #has-images #reading-15-demand-and-supply-analysis-the-firm #section-3-analysis-of-revenue-costs-and-profit
In this example the breakeven quantity occurs at output QBE, which corresponds to point B where price is tangent to the minimum point on the ATC.
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Open it Firms strive to reach initial breakeven as soon as possible to avoid start-up losses for any extended period of time. When businesses are first established, there is an initial period where losses occur at low quantity levels. In Exhibit 17, <span>the breakeven quantity occurs at output Q BE , which corresponds to point B where price is tangent to the minimum point on the ATC. (Keep in mind that normal profit as an implicit cost is included in ATC as a fixed cost.)
Exhibit 18 shows the breakeven point under perfect competition using the total rev
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