Consider Figure 23-5, and suppose that the price per unit corresponding to the position of d1 is at $4.50 per unit and that the quantity at point E1 is exactly 7 units per hour. Calculate total revenues, total costs, and economic profits at point E1 and explain why it is called the short-run break-even point.

For a firm, the earn back the original investment point is vital in light of the fact that there is neither benefit nor misfortune. Right now, the firm can run everyday exercises. Unequivocal expense is the conventional expenses of the firm like lease, pay rates to the workers and so on.

Calculating the total revenue,

$TR=P\times Q$

$4.50\times 7=31.5$

Calculating the total cost,

$$\begin{gathered} ATC\times Q \\ =4.50\times 7=31.5 \end{gathered}$$

The place where the all-out revenue and the complete expense become equivalent is called the breakeven point. Consequently, the make back the initial investment point is a place where the all-out cost and complete revenue become equivalent and there is no benefit or misfortune. The financial benefit right now will be equivalent to nothing. The monetary benefit of a firm is determined by deducting complete revenue from all-out costs. The absolute costs comprise of both certain and express expenses.