Abby is a marketing consultant who specializes in small businesses. Her current client is very interested in estimating the costs for the coming year, in order to find the break-even point. Abby knows this is an important financial statistic because below the break-even point, the firm operates:
A) with fixed costs only.
B) with minimal variable costs.
C) with no revenue.
D) with minimal profit.
E) at a loss.

Question

Quizplus · Accepted Answer

Below the break-even point, a firm operates at a loss because its total costs exceed its total revenue.

Abby Is a Marketing Consultant Who Specializes in Small Businesses