On a Profit-Volume Graph, the Intersection of the Profit Line

question 35

Multiple Choice

On a profit-volume graph, the intersection of the profit line with the vertical axis provides a

• A)profit of £1,000.
• B)profit equal to zero.
• C)profit equal to fixed costs.
• D)loss equal to fixed costs.

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Definitions:

Zero Price

Refers to a situation where a good or service is offered without requiring payment; often to promote sharing or distribution efficiency.

Marginal Utility

The supplementary satisfaction or advantage a consumer experiences by using one more unit of a good or service.

Diminishing

Refers to the principle where additional units of input result in progressively smaller increases in output, often applied in the context of diminishing marginal returns in production.

Dozen Oysters

A quantity of oysters amounting to 12 units, often used in the context of serving or purchasing seafood.