Question

Which of the following statements is true?

[1 mark]

• A. Price should be either equal to or less than AVC to break even.
• B. Price should always be equal to AVC.
• C. Price should be less than AVC.
• D. Price should be either equal to or more than AVC.

Answer 1

The correct option is D Price should be either equal to or more than AVC.

The price should be either equal to or more than AVC, so that the firm at least gets to the break even point.