If an Unprofitable Segment Is Eliminated

question 172

Multiple Choice

If an unprofitable segment is eliminated

• A) it is impossible for net income to decrease.
• B) fixed expenses allocated to the eliminated segment will be eliminated.
• C) variable expenses of the eliminated segment will be eliminated.
• D) it is impossible for net income to increase.

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Definitions:

Total Costs

The comprehensive sum of all expenses incurred in the production of goods or services, including fixed and variable costs.

Profit-maximizing Monopolist

A monopolist that determines the quantity of output that maximizes its profits, considering its total revenue and total cost.

Level of Output

The total amount of goods or services produced in an economy over a certain period of time.

Government

The organization, machinery, or agency through which a political unit exercises authority and performs functions and which is usually classified according to the distribution of power within it.