A Weakness of Break-Even Analysis Is That It Assumes

question 53

Multiple Choice

A weakness of break-even analysis is that it assumes

• A) revenue and costs are a linear (constant) function of volume.
• B) sales prices and costs increase when the economy is strong and confidence is high.
• C) the cost of goods sold goes up as revenue increases.
• D) None of the options are true.

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Definitions:

Plate Movements

Plate movements refer to the slow, continuous motion of Earth's lithospheric plates on the semi-fluid asthenosphere, causing phenomena like earthquakes, volcanic activity, and the formation of mountains.

Mid-ocean Divergent Boundary

A tectonic plate boundary where two plates are moving apart, creating new oceanic crust, typically at a mid-ocean ridge.

Submarine Lava Flows

Lava flows that occur beneath the ocean's surface, often originating from underwater volcanoes or fissures, contributing to the formation of new seafloor.

Lithosphere

The rigid outer layer of the Earth, encompassing the crust and the uppermost mantle, responsible for tectonic activities.