Break-even and Shut-down Points of Production
Break-even Point of Production The break-even point can be defined as the production and sales levels of a given product at which the revenue generated from the sales is perfectly equal to the production cost. At this point, the company…
Income Elasticity, Price Elasticity, and Cross Elasticity
Elasticity measures the sensitivity or responsiveness of one variable to another. There are three main forms of elasticity – price elasticity, income elasticity, and cross-price elasticity. Price Elasticity Price elasticity of demand is a measure of how a product’s demand…
Operating, Business, Sales, and Financial Risks
Risk can be defined in several ways. However, one fairly simple definition is that “risk refers to the uncertainty of a return and the potential for financial loss.” Risk can arise from financing and operating activities and can be classified…
