Assuming All Other Things Are Equal, Fixed Costs Must Have

question 7

Multiple Choice

Assuming all other things are equal, fixed costs must have ____ if there was a decrease in the break-even point.

• A)remained the same
• B)increased first, then decreased
• C)increased
• D)decreased

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Definitions:

Production Possibilities Frontier

A curve depicting all maximum output possibilities for two or more goods given a set of inputs, assuming all resources are fully utilized.

Labor Hours

The total number of hours worked by all employees or workers in a specific period, often used to measure productivity or output.

Producing

The process of creating goods or services to be offered for sale, involving the combination of various resources.

Opportunity Cost

The cost of foregoing the next best alternative when making a decision, representing the benefits missed out on.