When is production profitable according to price-taking firm at profit, break-even or loss?
Production profitable at profit, break-even or loss:
a. When TR > TC, in that case the firm is profitable.
When market price exceeds minimum average total cost, then the producer is profitable.
b. When TR = TC, then the firm breaks even.
When the market price equals minimum average total cost, in that case the producer breaks even.
The break-even price of certain a price-taking firm is the market price at that this earns zero profits.
c. When TR < TC, in that case the firm incurs a loss.
When market price is less than minimum average total cost, then the producer is unprofitable.