What Is the Effect on Break-Even Level of Revenues for Each

question 19

Multiple Choice

What is the effect on break-even level of revenues for each dollar of increase in fixed costs plus depreciation for a firm with 70 percent variable costs?

• A)an increase of $0.30.
• B)an increase of $1.00.
• C)an increase of $1.43.
• D)an increase of $3.33

---

Definitions:

Business-stealing Externality

A business-stealing externality occurs when the entry of new businesses reduces the demand for existing businesses, potentially lowering profits without necessarily benefiting consumers.

Positive Externality

An advantage received by individuals without their active choice, commonly linked to communal goods or services.

Lodging Markets

The segment of the hospitality industry that provides accommodations or places to stay to travelers.

Billboard Advertising

Billboard advertising is an outdoor advertising strategy that utilizes large-scale print advertisements to market products or services to passing pedestrians and drivers.