At the breakeven point,
A) the money a company brings in from selling products equals the amount spent producing the products.
B) the total fixed costs are exactly equal to the total variable costs.
C) profits are exactly equal to the difference between revenue and total variable costs.
D) the marginal revenue of a product is exactly equal to the marginal cost of producing one more unit.
E) the marginal cost curve and the average cost curve will be identical for a particular product.

Question

Quizplus · Accepted Answer

At the breakeven point, a company's total revenue is equal to its total costs, including both fixed and variable costs. This means that the money a company brings in from selling products equals the amount spent producing the products, making option A the correct choice. Option B refers only to the relationship between fixed and variable costs, while option C describes the calculation of profit, which is not relevant to the breakeven point. Option D refers to the relationship between marginal revenue and marginal cost, which may be relevant to profitability but not necessarily to the breakeven point. Option E refers to the shape of the cost curves and is not directly related to the breakeven point either.

At the Breakeven Point