MGMA01H3 Lecture Notes - Lecture 7: Break Even, Variable Cost, Fixed Cost
Document Summary
Break even point will be on the final exam. Break-even analysis (on final exam) profit (pi) = revenue - costs = p x q - (fc + vc) revenue = Price x quantity costs = fixed costs + variable cost (variable cost x quantity) **tc curve is always flatter than tr because otherwise, the company would make no revenue which means they wont exist. **break even point is always break even quantity. Break even point ----> 0 = p x q - (fc + vc) break eve quantity -----> q = fc/(p-vc) Possible exam question :there is a factory costs 1. 4 million.
