5.5.3—Effects of price and cost changes Topic Practice
5.5.3—Effects of price and cost changes Topic Practice
Students practise calculating and explaining how price or cost changes shift break-even quantity, profit, and margin of safety using case data and break-even charts.
How this is tested
- calculate new break-even quantity after a fixed or variable cost change, then interpret its impact on margin
- explain how a price reduction from foreign competition flattens the total revenue line and raises the break-even