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:

Economic Losses

Financial shortfalls that occur when a firm's total costs surpass its total revenues, leading to a negative profit margin.

Positively Correlated

Describes a relationship between events such that each event is more likely to occur if the other event also occurs.

Diversification

Diversification is an investment strategy that involves spreading investments across various assets to reduce risk and increase the potential for returns.

Positively Correlated

A relationship between two variables in which both variables move in the same direction.