Break-Even Charts Usually Assume That

question 93

Multiple Choice

Break-even charts usually assume that:

• A) total cost and total revenue curves are straight lines.
• B) profits will grow continually beyond the break-even point.
• C) the break-even point is reached when total cost just equals total revenue.
• D) any quantity can be sold at the assumed price.
• E) All of these are assumptions of break-even charts.

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Definitions:

Equilibrium

A state in which market supply and demand balance each other, resulting in stable prices and quantities.

Positively Sloped

A line or curve on a graph that moves upward and to the right, indicating a direct relationship between two variables.

Negatively Sloped

Describes a line on a graph that moves downward from left to right, indicating an inverse relationship between two variables.

Total Surplus

The sum of consumer surplus and producer surplus, representing the total benefits to society from the trade of a good or service.