Which of the Following Statements Is True About Break-Even Analysis

question 95

Multiple Choice

Which of the following statements is true about break-even analysis?

• A) It assumes that the demand curve is perfectly horizontal at the selling price.
• B) It reveals the price that will earn the highest profit.
• C) It cannot be used for comparing several different alternatives (for example, assuming different prices).
• D) It considers the effect of price on the quantity that consumers will want.
• E) It helps to compute break-even point in units alone.

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Definitions:

Oil

A viscous liquid derived from petroleum, mainly used for fuel, heating, and lubrication.

Imports

Products or services imported into a country from overseas for the purpose of selling.

Price

The funds expected, demanded, or provided in exchange for a particular good or service.

CD-Rom Drives

Devices that can read information stored on CD-ROMs, which are used for the digital storage of data.