ECONOMICS

Detailed explanation-1: -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-2: -In short, the lower your break-even point is, the better your business’ financial stability and profitability projections are. Reducing your break-even point allows your business to reach a point of profitability in a shorter time. For ecommerce businesses, the common move is to increase product selling prices.

Detailed explanation-3: -A lower break-even point means that your company has to sell fewer units or products to break even. A higher break-even point means your business has to sell more units or products to break even.

Detailed explanation-4: -The break-even point does not change when sales change. It remains the point at which revenue covers variable and fixed costs without any profit or loss. A company experiences a profit if sales surpass the break-even point and a loss if sales drop below it.

Detailed explanation-5: -Total profit at the break-even point is zero.