In a Cost-Volume-Profit Graph

question 98

Multiple Choice

In a cost-volume-profit graph,

• A) the total revenue line crosses the horizontal axis at the break-even point.
• B) beyond the break-even sales volume, profits are maximized at the sales volume where total revenues equal total costs.
• C) an increase in unit variable costs would decrease the slope of the total cost line.
• D) an increase in the unit selling price would shift the break-even point in units to the left.

---

Definitions:

Diminishing

A principle often observed in economics where additional units of a variable factor increase total output at a decreasing rate.

Positive Constants

Fixed values greater than zero that appear consistently within a mathematical equation or expression.

Isoquant Slope

The slope of an isoquant curve represents the rate at which one input can be substituted for another while maintaining the same level of output in production theory.

Input

Resources such as labor, materials, and capital that are used in the production process to create goods or services.