The Operating Breakeven Volume in Units Can Be Found by Dividing

question 14

True/False

The operating breakeven volume in units can be found by dividing the firm's total fixed cost in dollars by its profit margin per unit (i.e. ,price less variable cost).

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Definitions:

AVC

Average Variable Cost is the total variable costs divided by the quantity of output.

Diminishing Returns

A principle in economics where each additional unit of input results in a progressively smaller increase in output.

Diseconomies of Scale

The phenomenon where production costs per unit increase as a firm or industry's output expands.

Output

The amount of something produced by a person, machine, or industry.