Break-even pricing definition
What is the definition of "break-even pricing"?
Break-even pricing is a strategy that yields zero profit on a transaction. At break-even pricing the sales revenue equals expenses and is calculated by totaling the fixed and variable costs.
Break-even pricing may be used as an aggressive marketing tool for market expansion or penetration. Understanding break-even price points gives management the tools to work toward generating profits or whether or not to even enter a particular market.
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