Break-even analysis refers to
A)a process that investigates the magnitude of difference between marginal revenue and marginal cost.
B)a method of determining just how much a consumer is willing to pay for a product or service.
C)a technique that analyzes the relationship between total revenue and total cost to determine profitability at various levels of output.
D)the process of determining the quantity of product consumers will buy relative to the quantity produced by the firm.
E)the graph that shows the maximum number of products consumers will buy at a given price.

Question

Quizplus · Accepted Answer

Break-even analysis is a financial technique used to determine the level of sales at which a company will neither make a profit nor a loss. It analyzes the relationship between total revenue and total costs at different levels of output to determine the minimum amount of sales required to cover all costs. It is a useful tool for businesses when determining the viability of a new product or service, or when deciding whether to continue producing an existing product or service.

Break-Even Analysis Refers to