Break-even analysis is particularly accurate because it recognizes that the demand curve is downward sloping.

Question

Quizplus · Accepted Answer

Break-even analysis is a useful tool, but it does not take into consideration the shape of the demand curve. It is based on the assumption that the total revenue and total cost curves are linear and cross at a certain point, which is the break-even point. While the demand curve may impact the quantity of goods or services needed to be sold to break even, it is not a direct factor in the calculation.

Break-Even Analysis Is Particularly Accurate Because It Recognizes That the Demand