What Happens to Break-Even Point When the Sales Price Per

question 59

Multiple Choice

What happens to break-even point when the sales price per unit decreases?

• A) Break-even point increases.
• B) Break-even point decreases.
• C) Break-even point stays the same.
• D) None of these answers is correct.

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Definitions:

Average Revenue

The amount of money received by a firm per unit of output sold.

Average Variable Cost

The total variable costs divided by the quantity of output, representing the variable cost per unit of output produced.

Average Total Cost

The total cost of production divided by the total output or quantity produced, indicating the cost per unit of output.

Average Fixed Cost

The fixed costs of production (costs that do not change with the amount of output) divided by the quantity of output produced.