Break-Even Analysis
Source: Council for Economic Education (EconEdLink) | Type: Lesson
Students participate in a group activity in which they are assigned a business. They use breakeven analysis to calculate the number of units that must be sold or at what price each unit needs to sell in order to recover the variable and fixed costs and eventually realize a profit. They incorporate math skills in using the breakeven analysis formula to analyze different options for investing in capital resources (physical capital) to determine which option would allow a business to most quickly reach the breakeven point.
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