Breakeven Analysis Is the Method of Determining the Point at Which

question 3

Multiple Choice

Breakeven analysis is the method of determining the point at which sales will just cover ____ costs.

• A) labor
• B) inventory
• C) operating
• D) financing

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Definitions:

Demand Occurs

The moment at which consumers are willing and able to purchase a good or service at a given price.

Long-Run Equilibrium

A state in which all factors of production and costs are variable, and firms in the industry are earning only normal profits, with no incentive for entry or exit.

Inferior Good

A good or service whose consumption declines as income rises, prices held constant.

Constant Costs

Costs that remain unchanged regardless of the level of production or activity.