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What do you mean by break even point?

Posted by Shivani Jain 4 years, 3 months ago

CBSE > Class 11 > Entrepreneurship

1 answers

Yogita Ingle 4 years, 3 months ago

Break-even for a firm occurs when it is able to cover its all cost of production. Accordingly, break-even point is defined as a situation when AR = AC. Under this situation, the firm earns only normal profit.

The break-even point is graphically presented in the below figure. Break-even occurs at point Q. Here AR = AC. The firm is just making normal profits at break-even point.

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CBSE > Class 11 > Entrepreneurship