Regarding break-even analysis, a good marketing manager knows that:
A) a high fixed-cost contribution per unit will lead to high profits.
B) assuming a straight-line total revenue curve incorrectly suggests that any quantity can be sold at the assumed price.
C) break-even analysis is useless for comparing pricing alternatives.
D) the usual straight-line total cost curve applies only when economies of scale exist.
E) All of the above are true.

Question

Quizplus · Accepted Answer

Assuming a straight-line total revenue curve incorrectly suggests that any quantity can be sold at the assumed price, which is a limitation of break-even analysis.

Regarding Break-Even Analysis, a Good Marketing Manager Knows That