The Rule of Three States That the Third Major Company

question 199

True/False

The rule of three states that the third major company in an industry has little chance of survival.

---

Definitions:

Break-Even Point

The point at which total costs equal total revenue, resulting in no profit or loss for the business.

Fixed Costs

Regardless of how much is produced or sold, costs for rent, salaries, and insurance remain unchanged.

Variable Costs

Prices that adjust based on the quantity of products made or sold.

Pretax Income

Income earned by an entity before any taxes have been deducted.