Summary

Figure 2-6 shows the cost, revenue, and profit curves, along with the break-even points and the points of maximum profit and maximum revenue for a linear price-demand relationship. 

• At the break-even demand levels—where total cost equals total revenue—the profit function intersects the x-axis, indicating zero profit.

• Any demand below or above the break-even level results in a loss, as the profit curve goes under the x-axis.

• It is also evident that maximum profit occurs at a slightly lower demand level than maximum revenue, though this is not as evident in the graph as in comparison to Equation 2 3 and Equation 2 7. 

• Additionally, total revenue remains positive for any positive unit price and nonzero demand.