Some of the limitations may include:
- The break-even model assumes that all units produced are sold, therefore total revenue received if not all of the dolls/quantity is sold can be lower, which will have a negative impact on the break-even point.
- The break-even model assumes a linear relationship between output and total variable cost, whereas in reality the costs per unit can go down due to economies of scale. This will have a negative impact on the break-even point.
- The break-even model assumes that the price stays constant at all levels of output. In reality, price can be reduced or increased with direct impact on the break-even quantity.