A firm breaks even if it doesn't make any profit or loss?

• A. Fixed Costs
• B. Variable Costs
• C. Break Even
• D. Total Costs

Answer: (C)

Break-even is the level of sales where total revenue exactly covers total costs, so there is no profit or loss. It’s not a cost type itself; it’s the point at which the business’s income just meets its expenses.

Fixed costs are those that don’t change with output, like rent. Variable costs change as you produce more or less. Total costs are the sum of fixed plus variable costs at a given level of output. Break-even describes the situation where revenue equals all costs, resulting in zero profit.