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If the price per unit decreases because of competition but the cost structure remains the same will the breakeven point rise?
Wiki User
∙ 9y ago
Yes breakeven point will rise because contribution margin per unit reduces that's why more units require to recover fixed cost.
Wiki User
∙ 9y ago
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What happens if the price per unit decreases because of competition but the cost structure remains the same?
If the price per unit decreases because of competition but the cost structure remains the same
What happens to the breakeven point when you increase the selling price?
Increase in selling price reduces the breakeven point because due to increase in price contribution margin ratio also increases.
Which is more important accounting break-even point or financial break-even point?
The financial breakeven point is a more relevant measure than the accounting breakeven point because the accounting breakeven point does not consider the initial investment in the project. With any investment, one has the option to venture into it, or to take a less risky route and invest (in a bond or a stock that would give them a more guaranteed return). Thus an accounting breakeven, considers all cost, except the opportunity cost of the capital invested in project, and this is something that the financial breakeven considers. Financial breakeven point is the point where NPV is greater than or equal to zero: the point where there is economic value added® (a term trademarked by Stem-Stewart). This is because in calculating the financial breakeven, the formula includes the opportunity cost of capital: the initial investment divided by the timeannuity factor at the discount rate (where the discount rate is the opportunity cost of capital).
Is a monopoly always the best market structure for maximizing shareholder wealth?
No,because in a monopolistic situation initially a company can gain because of it's superior pricing and no competition in the market but in the long run due to lack of productive competition,the system becomes lax and unproductive since there is no improvement in the system due to lack of competition.
What is the market structure of apple?
I think the market structure of the apple is oligopoly because the firm like apple creating the ipod and iphone is some what few not exceed to 10 also. so, the firm apple applies to oligopoly market structure.
What happens if the price per unit decreases because of competition but the cost structure remains the same?
If the price per unit decreases because of competition but the cost structure remains the same
Price per unit decreases but cost structure remains the same?
If the price per unit decreases because of competition but the cost structure remains the same
When fixed cost decreases what does this do for the break-even point?
When fixed assets reduces it also reduces the breakeven point because now less number of units required to fulfill the fixed cost.
What happens to the breakeven point when you increase the selling price?
Increase in selling price reduces the breakeven point because due to increase in price contribution margin ratio also increases.
Which is more important accounting break-even point or financial break-even point?
The financial breakeven point is a more relevant measure than the accounting breakeven point because the accounting breakeven point does not consider the initial investment in the project. With any investment, one has the option to venture into it, or to take a less risky route and invest (in a bond or a stock that would give them a more guaranteed return). Thus an accounting breakeven, considers all cost, except the opportunity cost of the capital invested in project, and this is something that the financial breakeven considers. Financial breakeven point is the point where NPV is greater than or equal to zero: the point where there is economic value added® (a term trademarked by Stem-Stewart). This is because in calculating the financial breakeven, the formula includes the opportunity cost of capital: the initial investment divided by the timeannuity factor at the discount rate (where the discount rate is the opportunity cost of capital).
Is a monopoly always the best market structure for maximizing shareholder wealth?
No,because in a monopolistic situation initially a company can gain because of it's superior pricing and no competition in the market but in the long run due to lack of productive competition,the system becomes lax and unproductive since there is no improvement in the system due to lack of competition.
Why did American want to Americanized immigrants?
Because of business competition
Why does colored water separate when frozen?
it doesn't separate because it is frozen. it separates because the temperature decreases, and as temp. decreases, solubility decreases
If resistance decreases then power?
Resistance is decreases then the voltage drop across it is decreases because of ohms law (V=IR),due to this power can also be decreases because of P=VI. so finally we can say that resistance decreases ,power also decreases.
What happens to the thermal energy of an object as temperature decreases as it increases?
it decreases because when an object is moving as the temperature decreases the object decreases
What is the market structure of apple?
I think the market structure of the apple is oligopoly because the firm like apple creating the ipod and iphone is some what few not exceed to 10 also. so, the firm apple applies to oligopoly market structure.
Why does competition thrive in the business world?
because of competition
