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The output at which total revenue equals total cost is the _____ point.

  • A.breakeven
  • B.payback
  • C.design
  • D.optimum

Answer: A

Correct answer: breakeven

The breakeven point:

\[ Q_{BE} = \frac{\text{Fixed cost}}{\text{Price} - \text{Variable cost}} \]

Below it the plant loses money; above it, each additional tonne adds its contribution to profit.

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