Once a firm has established its break-even point for a product, it has a starting point for estimating how much revenue it must generate to earn a profit.

Question

Quizplus · Accepted Answer

The break-even point is the level of production and sales at which total revenues equal total expenses. Once a firm knows its break-even point, it can determine how much more revenue it needs to generate beyond this point to start making a profit.

Once a Firm Has Established Its Break-Even Point for a Product