Refer to the ﬁgure above.Assume that the company whose cost structure is depicted in the ﬁgure expects to produce a loss for the upcoming period.The loss would be shown on the graph:

Question

Quizplus · Accepted Answer

If the company expects to produce a loss, it means that its total costs would exceed its total revenue. Therefore, the break-even point would not be reached and the area diagonally to the left of the break-even point would represent the loss. This area shows the difference between the total costs and the total revenue at the expected level of output.

Refer to the ﬁGure Above