When a firm operates where total revenue equals total cost, it is said to be:

When a firm operates where total revenue equals total cost, it indicates that the firm is not making a profit or incurring a loss; instead, it has reached a state known as "breaking even." At this point, the revenues generated from sales are exactly sufficient to cover all expenses incurred in producing and selling the goods or services. This situation is crucial for businesses, as it highlights the threshold at which they cover their operating costs, including both fixed and variable costs.

Understanding the breaking even point helps firms make informed decisions regarding pricing, production levels, and market strategies. When a firm is at this level, it can focus on finding ways to increase revenue or decrease costs in the future to move into profitability. In contrast, the other concepts of making a profit or being in a loss reflect situations where the revenue differs from total costs, and maximizing output pertains more to production efficiency rather than financial equilibria.