On the crossover chart where the costs of two or more location alternatives have been plotted,the quantity at which two cost curves cross is the quantity at which:
A)fixed costs are equal for two alternative locations.
B)variable costs are equal for two alternative locations.
C)total costs are equal for all alternative locations.
D)fixed costs equal variable costs for one location.
E)total costs are equal for two alternative locations.

Question

Quizplus · Accepted Answer

The crossover point is the point where the total costs of two or more location alternatives become equal. This is the point where the total costs of one location would become higher than the total costs of another location. Therefore, the correct choice is E.

On the Crossover Chart Where the Costs of Two or More