ECONOMICS

Detailed explanation-1: -With increasing costs, a business would have to sell more products in order to break even or make a profit. When costs increase, businesses often have to make the choice of absorbing increased costs or passing them on to customers by increasing prices. As a result, the business will be more likely to make a loss.

Detailed explanation-2: -Break-Even Decrease The result of is a decrease in your break-even point. This means your business must generate less revenue to break even after you increase the contribution margin for your products than prior to the contribution margin increase.

Detailed explanation-3: -A low breakeven point means that the business will start making a profit sooner, whereas a high breakeven point means more products or services need to be sold to reach that point.

Detailed explanation-4: -Break-even point This is the point where your total revenue (sales or turnover) equals total costs. At this point there is no profit or loss-in other words, you ‘break even’.