Break-Even Analysis Is Used to Tell How Many Units Must

question 28

True/False

Break-even analysis is used to tell how many units must be sold in order to break even at a particular selling price.

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Definitions:

Constant Returns To Scale

A situation in production where an increase in the input of resources leads to a proportionate increase in output, resulting in no change in average costs.

Production Function

The relationship between the quantity of inputs used to make a good and the quantity of output of that good.

Inputs

Resources such as labor, materials, and capital that are used in the production process to create goods or services.

Output

The total quantity of goods or services produced within a given period by a firm, industry, or country.