Break-even is represented by: BE = [(Price - Variable costs) × Demand] - (Fixed costs).

Name: Break-even is represented by: BE = [(Price - Variable costs) × Demand] - (Fixed costs).
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Question

Quizplus · Accepted Answer

The break-even point is calculated by setting total revenue equal to total costs, not by subtracting fixed costs from the product of (Price - Variable costs) and Demand. The correct formula is BE = Fixed Costs / (Price - Variable Costs).

Break-Even Is Represented By: BE = [(Price - Variable Costs)