Question

When a firms average revenue is equal to its average cost, it gets

Answer 1

Explanation:

When a firms average revenue is equal to its average cost, it gets normal profit.

Answer 2

When a firm’s ‘average revenue’ is equal to its average cost, it gets normal profits.

Explanation:

• The average cost being equal to average revenue is when the firm wanting to sell their products at no profits.  

• They want to maximize on the longer-term gains. A new that enters the market would use this method to familiarize the end-users with their products.  

• When the product gets established in the market and the people are familiar with it they can slowly remove these promotional methods and the organizations can then move towards profits.