Changes in price and costs

IB Business Management: Changes in price and costs

An increase in the selling price reduces a firm’s break-even level of output. Diagrammatically, the higher price results in a greater gradient of the total revenue line (from TR1 to TR2), as shown in the diagram below. This reduces the break-even quantity from BEQ1 to BEQ2.The opposite is true for a reduction in price, i.e. the firm would have to sell more in order to break-even.This means that a higher price will...


To access the entire contents of this site, you need to log in or subscribe to it.

Click the free stuff button on the home page to access free pages or check the blog (which is also free)

All materials on this website are for the exclusive use of teachers and students at subscribing schools for the period of their subscription. Any unauthorised copying or posting of materials on other websites is an infringement of our copyright and could result in your account being blocked and legal action being taken against you.