Break-even analysis determines the yield level at which revenue just covers total costs. This statement is:

Break-even analysis determines the yield level at which revenue just covers total costs. This statement is:

• A. True
• B. False
• C. Only for Crops
• D. Not Applicable to Break-Even

Answer: (A)

Break-even analysis identifies the production level where revenue just covers all costs, so profit is zero. In practical terms, revenue equals price per unit times the yield, and total costs include fixed costs plus variable costs. The break-even yield is the point where price × yield equals total costs, meaning revenue exactly covers costs. Therefore, the statement is true. This concept isn’t limited to crops; it applies to any enterprise: if price or costs change, the break-even yield adjusts accordingly, since break-even yield = total costs divided by price per unit. Below that yield, there’s a loss; above it, there’s a profit.

Break-even analysis identifies the production level where revenue just covers all costs, so profit is zero. In practical terms, revenue equals price per unit times the yield, and total costs include fixed costs plus variable costs. The break-even yield is the point where price × yield equals total costs, meaning revenue exactly covers costs. Therefore, the statement is true.

This concept isn’t limited to crops; it applies to any enterprise: if price or costs change, the break-even yield adjusts accordingly, since break-even yield = total costs divided by price per unit. Below that yield, there’s a loss; above it, there’s a profit.