The Intersection of the Supply and Demand Curves Indicates

question 229

Multiple Choice

The intersection of the supply and demand curves indicates:

• A) the equilibrium solution in the market.
• B) a surplus that will cause the price to fall.
• C) a shortage that will cause the price to rise.
• D) the quantity demanded exceeds the quantity supplied.

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Definitions:

Break-even Point

The level of production or sales at which total revenues equal total expenses, with no net loss or gain.

Total Sales Revenue

The overall income generated from selling goods or services before any expenses are subtracted.

Operating Leverage

A measure of how revenue growth translates into growth in operating income, indicating the proportion of fixed versus variable costs a company has.

Margin of Safety

This measures the difference between actual sales and sales at the break-even point, indicating the amount by which sales can drop before losses start occurring.