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Breakeven

The breakeven point in economics is the point at which cost or expenses and income are equal - there is no net loss or gain, one has "broken even".

The point at which a firm or other economic entity breaks even is equal to its fixed costs divided by its contribution per unit output, which can be shown by the following formula: -

\mbox{Breakeven Point} = {\mbox{Fixed Costs} \over \mbox{Contribution per Unit Output}}

The break even point is also the point on a chart indicating the time when something has broken even, and is a general term for not having gained or lost something in a process.

Other uses of the term

In nuclear fusion research, the term breakeven refers to a fusion energy gain factor equal to unity.

The notion can also be found in more general phenomena, such as percolation, and is rather similar to the critical threshold.

01-04-2007 01:16:19
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