Phil Asks You to Calculate the Break-Even Point for His

question 20

Multiple Choice

Phil asks you to calculate the break-even point for his firm.You respond that you will need the following information:

• A)the values for all assets and liabilities.
• B)total fixed costs,selling price,and variable costs per unit.
• C)forecasted sales volume,operating expenses,and asset values.
• D)sales revenue and total liabilities.

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Definitions:

Long Run

A period in economic analysis where all factors of production are variable, allowing for complete industry adjustment.

Industry Supply

The total output of goods or services that firms in a specific industry are willing and able to sell at various prices, over a certain period of time.

Purely Competitive Industry

A market structure where many firms offer products or services that are similar, allowing for free entry and exit, and ensuring no single firm can influence market prices.

Long-Run Adjustments

Changes in the scale of production or in the input mix used by firms in response to economic conditions over a period where all inputs can be varied.