How to find break-even point (economic problems)

How to find break even point after finding profit problem (economics)

Instructions

Difficulty: Moderate

Things You’ll Need:

• calculator and problem

1. Break Even Problem
   You have to set Total Revenue Equal to Total Cost
   
   TR= TVC + TFC
   ( =Total Revenue) = Total Variable Cost + Total Fixed Cost
   
   *****Do next step below*****
2. (P x Q) = (AVC x Q) + TFC
   (Price x Quantity) = (Average Variable Cost x Quantity)+ Total Financial Cost
   
   *****Do next step below*****
3. =(P x Q)- (AVC x Q) = TFC
   =(Price x Quantity) - (Average Variable Cost x Quantity) = Total Financial Cost
   
   *****Do next step below*****
4. Q (P-AVC) = TFC
   Quantity (Price- Average Variable Cost)= Total Financial Cost
   
   *****Do next step below*****
5. The Break Even Point Quantity Is
   
   Q= TFC / (P-AVC)
   Quantity= Total Financial Cost divided (Price - Average Variable Cost)