What is the simple meaning of break-even point?
Answer and explanation
Correct answer: The point where total revenue equals total cost
The break-even point is the sales level at which total revenue equals total cost, including fixed and variable costs. At this level, profit is zero and loss is also zero. Sales above the break-even level may create profit, while sales below it may create loss, depending on the cost structure. Therefore, option A is correct.
Frequently asked questions
What is the correct answer to this question?
The point where total revenue equals total cost
Why is this the correct answer?
The break-even point is the sales level at which total revenue equals total cost, including fixed and variable costs. At this level, profit is zero and loss is also zero. Sales above the break-even level may create profit, while sales below it may create loss, depending on the cost structure. Therefore, option A is correct.
Which subject and chapter does this question cover?
This is a Class 11 Business Studies question. Chapter: MSME and Business Entrepreneurship. Topic: Entrepreneurship Development.
