All Else Equal, an Increase in Fixed Costs

question 42

Multiple Choice

All else equal, an increase in fixed costs
I.increases the break-even point based on NPV;
II.increases the accounting break-even point;
III.decreases the break-even point based on NPV;
IV.decreases the accounting break-even point

• A)I and IV only
• B)III and IV only
• C)II and III only
• D)I and II only

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Definitions:

Rival in Consumption

Refers to a situation where the consumption of a good by one individual prevents or diminishes its consumption by another.

Club Goods

Goods that are excludable but non-rivalrous, meaning they can be accessed by members of a specific group but one person's use does not diminish availability for others.

Public Goods

Goods that are non-excludable and non-rivalrous, meaning they can be used by everyone and one person's use does not reduce availability for others.

Public Goods

Goods that are non-excludable and non-rivalrous, meaning they are available to all members of society and one person's consumption does not reduce availability for others.