CVP Analysis Is Most Likely to Be Used for Which

question 20

Multiple Choice

CVP analysis is most likely to be used for which of the following decisions?

• A) The amount of discretionary expenditures for the next period
• B) The organisational vision
• C) The exact level of operations at which the organisation will operate
• D) Whether to buy a business segment operating in Germany

---

Definitions:

Kink

A sudden change in the rate or direction of a curve or line, often used in economics to describe a sharp change in a demand or supply curve.

Kinked Demand Curve

A demand curve that has a distinct bend or kink, typically used in oligopoly models, suggesting that a firm will face different elasticities for price increases versus price decreases.

Lower Prices

A decrease in the cost of goods or services, often resulting in increased demand or consumer purchasing power.

Price Leadership

Strategy where the leading firm in an industry sets the price of goods or services, which other firms in the market then follow or undercut.