FIGURE25-2Costs and Production in the Short Run

This figure shows the marginal cost curve, MC, and the short-run average total cost curve, ATC. When the market price is $14, output will be 4 bushels of tomatoes (the minimum-cost output), represented by point C. The price of $14 is equal to the firm’s minimum average total cost, so at this price the firm earns neither a profit nor a loss (it breaks even).