The lower a firm's break-even point, the lower amount of quantity which needs to be sold in order to reach a profit of zero. True or False True False
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- Suppose a company increases the price of its product and demand hardly declines.which of the following will increase? A) profit margin B) return - on - equity C) taxes D) all the aboveWould an increase in per-unit selling price cause a company’s break-even point to increase or decrease? Why?Lowering price does not always increase revenue with increased demand. Besides reducing price, what else can a firm do to stimulate demand for its product?
- The operating break-even sales level is not sensitive to which of the following variables? fixed operating costs sales price per unit dividend payments sales commissions expense EThe margin of safety can be defined as the amount by which sales can decrease beforelosses are incurred by the company.TRUEFALSEWhich of the following statements is true? A In linear break-even analysis, the contribution margin is the difference between the selling price and the average fixed cost. B The Theory of the Business Firm assumes perfect market competition. This means it assumes that the selling price decreases as a firm's production rate increases. C In the Theory of the Business Firm, profits per period are maximized at the production rate at which marginal cost equals average cost. D In the Theory of the Business Firm, profits per period are maximized at the production rate at which average cost is minimized. E All four statements are false.
- Assuming everything else constant, which of the following will NOT make net profit margins increase? Decrease in Selling, General, and Administrative expenses. Increase in Research & Development expenses. Decrease Research & Development expenses. Decrease costs of goods sold.Question-. If a pure monopolist can price discriminate by separating buyers into two or more groups: A. the marginal revenue curve will now shift to a position above the demand curve. B.marginal revenue will become less at each level of output than it would be without price discrimination. C. the firm will face multiple marginal revenue curves. E. the marginal revenue curve and the total revenue curve will now coincide I think the answer is C?The profit maximizing condition for a purely competitive firm is when. Price elasticity of demand is positive. Price average total costs O Price - average total costs
- Calculating the margin of safety (MOS) measure will help a firm answer which of the following questions? How much will operating profit (πB) change if sales change? Are we using our debt wisely? Will we break even? How much revenue can we lose before we drop below the breakeven point? How much operating profit (πB) will we earn?What is the interpretation of a price-to-book ratio = 1?Select one:a. The selling price of the firms’ products equal to the market value of the productsb. The Market thinks the book value of the firm is greater than the market valuec. None of the given choicesd. The market is valuing the firm at its book valuetrue or false The smaller the contribution margin ratio, the larger the amount of sales required to cover a given amount of fixed expenses True False The margin of safety can be defined as the amount by which profit can decrease before losses are incurred by the company True False A big increase in sales will result in a small increase in profit if there is a low degree of operating leverage in a company True False