From the graph below, answer the following questions.
What is the break even point?
Answer & explanation
Correct answer: option 3
The correct answer is Option 3: Point A and point B
When consumption is equal to income, it is a break even point. So, point B is a breakeven point in the given figure. Point B implies APC =1 and Zero savings.
Further, we know that Y= C+ S
At point A, S = 0.
So, at point A also, Y = C, which makes it also a breakeven point.