Break Even Point Economics is the analysis of business decisions in terms of their expected financial performance. It examines the profitability potential of any proposed business venture, taking into account variable and fixed costs. With this knowledge, businesses are able to identify the break-even point or price point at which a product breaks even – where total revenues are equal to total expenses. By understanding their break-even point, companies can better evaluate the risks associated with pursuing any given project and make informed decisions about how to allocate resources to maximize their return on investment.