The break-even price is the minimum price a business must charge to cover all its costs. At this point, the business makes no profit and suffers no losses.

Key points:

• Break-even price is equal to the minimum average cost (AC).
• At this price, Total Revenue equals Total Cost, resulting in zero economic profit.
• If the market price is higher than the break-even price, the business makes a profit.
• If the market price is lower than the break-even price, the business experiences a loss.

Difference from shut-down price:

• The break-even price covers all costs (fixed and variable).
• The shut-down price only covers variable costs.
• The shut-down price is lower than the break-even price.

In a perfectly competitive market, businesses naturally reach the break-even price in the long run.