Assuming All Other Things Are Equal, Fixed Costs Must Have

question 7

Multiple Choice

Assuming all other things are equal, fixed costs must have ____ if there was a decrease in the break-even point.

• A)remained the same
• B)increased first, then decreased
• C)increased
• D)decreased

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Definitions:

Pollution

The contamination of the environment with harmful or poisonous substances, adversely affecting the health of living organisms and ecosystems.

External Costs

Costs of an economic activity that are not borne by the participants but rather by other people or society at large.

Tax

A compulsory financial charge imposed by a government on individuals or entities to fund various public expenditures.

Marginal Social Benefit

An additional gain to society derived from consuming or producing another unit of a good or service.