Businesses must often make decisions based on the relationship between total revenue and total cost at various levels of output. The is the quantity at which total revenue and total cost are equal.

Break even point

Explanation:

The break even point is the number of units a company must sell such that total revenue equals the total cost. The total cost is usually made of the fixed and variable components.

The number of units required to break even ( that is to make no loss nor gain) is a factor that determines the total sales and the variable cost. It however may not affect the fixed cost.

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