no inventory control
everything made is sold

linear relatioships
everything is independent of each other (static model)

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bit like economic model
changes can be represented are like shifts in the curves.

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VC increase, increases or decreases slope.

the extra cost is more significant. VC increase is extra cost on every peice of product produced

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Play media

really the change is the change in fixed costs

that extra cost will not increase.

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- TR start at origin
- ideally steeper slope than TC or else never make money
- BEP
- BER, y value of BEPoint
- BEOutput, x value

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- margin of safety measures how much above BEOutput. difference in X VALUE

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