Break-even point refers to the equilibrium point at which a manufacturer can realize normal profit without economic profit, and it is the intersection of marginal cost and average cost.

The manufacturer's demand curve D is tangent to the lowest point of SAC curve, which is the intersection of SAC curve and SMC curve, that is, P=SMC=SAC. This happens to be the equilibrium point of MR=SMC profit maximization. From the perspective of balanced output, the average income is equal to the average cost, and the profit of the manufacturer is zero, but the normal profit of the manufacturer is realized. Because at this equilibrium point E, the manufacturer has neither profit nor loss, so this equilibrium point is also called the break-even point of the manufacturer.

The stopping point is the intersection of average variable cost (AVC) and marginal cost.

Under the condition of perfect competition, the average profit of the manufacturer is equal to the average variable cost, and the manufacturer can continue to produce or not, which means that the result of whether the manufacturer produces or not is the same. Because at this equilibrium point, the manufacturer is at the critical point of closing the enterprise, therefore, this equilibrium point is also called the stopping point or closing point, and the average income is completely lower than the average variable cost. This is a loss model, and then it is closed.

Through the study of theoretical knowledge, no one will be willing to do business at a loss.