If Calculations Show That the Break-Even Point Is Too High

question 52

Multiple Choice

If calculations show that the break-even point is too high for the period which of these is not a possible course of action?

• A)consider reducing prices
• B)consider changing the cost mix between fixed and variable costs
• C)consider changing the sales mix
• D)recheck the assumptions on which the analysis is based

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Definitions:

Consumer Surplus

The difference between the total amount that consumers are willing and able to pay for a good or service and the total amount that they actually do pay.

Quota Rights

Licenses or permissions issued by a government that allow specific quantities of goods to be imported or exported.

Economic Welfare

The overall well-being and standard of living of people in terms of the quantity and quality of goods and services available to them.

Consumer Surplus

The difference between what consumers are willing to pay for a good or service and what they actually pay.