Hints on changing price
|
|
Advantages
|
|
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
|
|
Navigation
|
Break even analysis home page »»
Return to the question page »» |