Price Change Hint - Break-Even Analysis [Virtual Learning Arcade]
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| | If the price of the product increases for a given quantity, then the total revenue will increase. The effect is illustrated in the diagram. The total revenue curve pivots upwards. This causes the break-even point to occur at an earlier output level. Hence, the margin of safety will increase.
INCREASE IN PRICE » DECREASE IN BREAK EVEN LEVEL OF OUTPUT
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Submitted by bized on Wed, 14/03/2001 - 13:00