Break even point: Difference between revisions
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1. (BEP). | 1. | ||
(BEP). | |||
The number of units of production at which contribution is equal to total fixed cost, in other words this is the level of production at which a producer will neither earn a profit nor make a loss. | The number of units of production at which contribution is equal to total fixed cost, in other words this is the level of production at which a producer will neither earn a profit nor make a loss. | ||
2. | 2. | ||
The market price at which a strategy results in neither a profit nor a loss. | The market price at which a strategy results in neither a profit nor a loss. | ||
3. | 3. | ||
A point - for example an out-turn market price - at which two alternative strategies give the same result. | A point - for example an out-turn market price - at which two alternative strategies give the same result. | ||
It is therefore the point of ''indifference'' between two choices or strategies. For example two trading strategies each resulting in the same expected profit. | It is therefore the point of ''indifference'' between two choices or strategies. For example two trading strategies each resulting in the same expected profit. | ||
So when the break even point is crossed, the optimum decision or choice will change. | So when the break even point is crossed, the optimum decision or choice will change. | ||
== See also == | == See also == | ||
Revision as of 10:48, 11 May 2016
1.
(BEP).
The number of units of production at which contribution is equal to total fixed cost, in other words this is the level of production at which a producer will neither earn a profit nor make a loss.
2.
The market price at which a strategy results in neither a profit nor a loss.
3.
A point - for example an out-turn market price - at which two alternative strategies give the same result. It is therefore the point of indifference between two choices or strategies. For example two trading strategies each resulting in the same expected profit. So when the break even point is crossed, the optimum decision or choice will change.
