Suppose Fixed Costs Increase

question 81

Multiple Choice

Suppose fixed costs increase. What will be the effect on the break-even point in units?

• A) The break-even point will increase.
• B) The break-even point will decrease.
• C) The break-even point will remain the same.
• D) The break-even point will remain the same; however, contribution per unit will decrease.

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Definitions:

Income

The amount of money or goods that an individual or entity receives in exchange for providing a good or service, or through investing capital.

Utility Functions

Representations that quantify the satisfaction or happiness consumers gain from consuming various bundles of goods and services.

Fair Allocations

In economics and game theory, it refers to the distribution of resources or goods among participants in such a way that the allocation is considered equitable according to certain criteria.

Apples

A type of fruit that is grown on apple trees and comes in several varieties differing in sweetness, color, and size.