Which of the Following Is True of Simple Break-Even Analysis

question 35

Multiple Choice

Which of the following is true of simple break-even analysis?

• A)​It ignores the selling price of a product.
• B)It does not give weightage to the cost of labor that is incurred during production.
• C)It is applicable only when the demand for a product is elastic.
• D)​It ignores the demand for a product.

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Definitions:

Depreciation

The process of allocating the cost of a tangible asset over its useful life, reflecting a decrease in its value over time.

Consumption

The use of goods and services by households, which is a primary component of GDP and a key indicator of the economic health of a society.

Gross Domestic Product

The total value of all goods and services produced within a country's borders during a specific time period, used as a broad indicator of economic health.

Indirect Business Taxes

Taxes levied on goods and services rather than on income or profits, such as sales tax, often passed on to the consumer.