Break even and shutdown points of a firm under perfect competition

Break even and shutdown points of a firm under perfect competition

Break-  even point   This  is refers  to the point  in the production   process  at which  the firm under perfect  competition   neither  earns profits  nor makes  losses.  That  is the firm  earns normal profits From  the graph,  it is indicated  at point  B where  marginal   revenue  curve  meets  the average  cost curve.

Shut down point.  This  refers  to a point  in the  production   process  below  which  the  firm  under perfect  competition   cannot  cover the   variable  costs  of production.   From the graph, it is indicated at point S where average variable cost curve meets the marginal revenue   curve.