Break-even Analysis Form
BREAK-EVEN ANALYSIS - 9
1. The main purpose of break-even analysis is to determine the output level at which TR is
equal to TC. Break-even analysis is easy to do (and thus its popularity) if both the
product price and the average cost are constant. Graphically, the break-even output is
where the TR curve and the TC curve intersect.
2. Break-even analysis is a popular tool to examine the effects of TFC and TVC on break-
even output level and on the degree of operating leverage. The degree of leverage
expresses the sensitivity of total profit with respect to output.
Break-even Analysis Form PDF
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