Which of the Following Statements Is True About Breakeven Analysis

question 72

Multiple Choice

Which of the following statements is true about breakeven analysis?

• A) The breakeven point can only be stated in terms of sales revenue.
• B) At the breakeven point, the firm's fixed costs are greater than its variable costs.
• C) At the breakeven point, the firm's fixed costs are less than its variable costs.
• D) At the breakeven point, the firm's sales price per unit equals its variable cost per unit.
• E) At the breakeven point, the firm's sales revenue equals the sum of its fixed and variable costs.

---

Definitions:

Theorem

A statement or proposition that is proven on the basis of previously established statements or propositions.

Externalities

Economic side effects or consequences of a commercial activity that affect other parties without being reflected in the costs of the goods or services involved.

Negative Externality

A cost that affects a party who did not choose to incur that cost or benefit from it, often considered a failure of the market.

Market Inefficiency

A situation where market prices do not always accurately reflect the true value of a good or service, possibly due to lack of information or irrational behavior.