If the Price Decreases, but Fixed and Variable Costs Do

question 78

Multiple Choice

If the price decreases, but fixed and variable costs do not change, the break-even point

• A) decreases
• B) increases
• C) remains the same
• D) may increase or decrease, depending on sales

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Definitions:

Market Price

The immediate rate at which assets or services are traded in the open market.

Par Common Stock

The nominal or face value of a share of common stock, as stated in the corporate charter.

Fair Market

The price at which a willing buyer and seller would agree to transact in an open and unrestricted market.

Common Stock

Common stock represents equity ownership in a corporation, where shareholders are entitled to vote on corporate matters and possibly receive dividends.