If Fixed Costs Increased and Variable Costs Per Unit Decreased

question 200

Multiple Choice

If fixed costs increased and variable costs per unit decreased, the break-even point

• A) would increase
• B) would decrease
• C) would remain the same
• D) cannot be determined from the data provided

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Definitions:

Income

Payment for services or from investment returns, customarily coming in at steady intervals.

Preferences

In economics, it refers to the ordering of different alternatives by individuals based on their satisfaction, utility, or happiness.

Compensating Variation

A measure in economics of the amount of money one would need to reach their original utility level after a change in price or income.

Equivalent Variation

An economic measure of the amount of money that leaves an individual equally well off, given changes in prices or utility.