Price Change Hint - Break-Even Analysis [Virtual Learning Arcade]

Hints on changing price

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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.

an increase in price on the break even point

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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