Advantages
- Works well for businesses with standardised products.
- Works well for businesses in one single market.
- Works well for pre-order products.
Disadvantages
- Assumes cost functions are linear but in reality economies of scale affects costs.
- Assumes that no discounts will be made.
- Assumes all output is sold.
- Static.
- Garbage in garbage out.
- Qualitative factors can affect break-even.
- Only suitable for single product firms.
