Draw consumption curve and saving curve in a single diagram and mark the break-even point. ?

Now what are break-even points on C and S curves ?? I know with TR and TC that break even points are points where TR=TC and there is neither profit nor loss.

Reply as soon as possible.

In the upper panel of the diagram, *CC *represents the consumption curve. 45° line is the line representing aggregate supply (*Y). *In the lower panel, *SS *represents the saving curve. At point *A*, the 45° line intersects the consumption curve i.e. at point *A*, Income = Consumption. This implies that whole income is spent on consumption, therefore, saving is zero. This point is known as ** break-even point**. Corresponding to point A, the point B in the lower panel represents zero level of savings (

*S*= 0). Thus, we can say that at the break-even point, the economy is consuming all what it is earning and there are no saving.

As you mentioned that break-even points in terms of TR-TC approach implies the particular points where TR equals TC and there exists neither any profits or any losses. Similarly, in macroeconomics, the break-even points in terms of consumption and saving implies a situation, where consumption equals income and there exists neither any positive saving nor any negative savings (in form of past borrowings).

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