The Accounting Break-Even Point for a Firm Is a Function

question 1

Multiple Choice

The accounting break-even point for a firm is a function of its:

• A) net cash flows and depreciation expense.
• B) fixed costs and profit on each sale.
• C) variable costs and its tax liability.
• D) revenues and fixed costs.

---

Definitions:

Excess Profit

Profit earned by a firm that exceeds the normal level of profit in its industry, often due to monopolistic power or a lack of competition.

Economic Profit

The difference between the total revenue earned from production and the total costs (including both explicit and implicit costs) involved in the creation of that production.

Excess Profit

Profit earned by a firm that exceeds the normal profit level, often due to monopolistic power or market inefficiencies.

Marginal Revenue

The additional income generated from selling one more unit of a good or service.