Suppose a firm raises the price of its output from Rs 3 to Rs 4 per unit, the MC% would be [(4 – 2)/4] or 0.5 or 50%. The BEP with a fixed cost of Rs 20,000 as mentioned in the earlier examples, would...

Suppose a firm raises the price of its output from Rs 3 to Rs 4 per unit, the MC% would be [(4 – 2)/4] or 0.5 or 50%. The BEP with a fixed cost of Rs 20,000 as mentioned in the earlier examples, would be Rs 40,000 instead of Rs 60,000. And with a sale value of Rs 1,20,000, the profits will be reaped to the extent of Rs [(1,20,000 × 0.5) – 20,000] = Rs 40,000 as against Rs 20,000, when the price was Rs 3 per unit.