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Question
What is meant by the break-even point?
Solution
- A manufacturing company may find itself in a no-profit, no-loss predicament.
- It occurs when the total revenue (TR) equals the total cost (TC).
- As a result, the break-even point is the moment at which a company's total cost equals its total revenue.
- The break-even point of a business is the amount of output at which total revenue equals total cost.
- (TR =TC) or (TR/Q = TC/Q) or AR = AC.
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