Question

The break-even point is a point where _______________.

• A. There is profit
• B. There is loss
• C. There is neither loss nor profit
• D. None of these

Answer 1

Answer: (C)

There is neither loss nor profit

The break even point in economics, business and specifically cost accounting is the point at which total cost and total revenue are equal i.e. "even". There is no net loss or gain, and one has "broken even", through opportunity costs have been paid and capital has received the risk-adjusted expected return. In short, all costs that must be paid are paid, and there is neither profit nor loss.