In a breakeven analysis, when the total cost curve intersects the total revenue curve, profits will be zero. What is also true at the point of intersection?
A) Losses will also be zero.
B) Losses will be at their maximum level.
C) A price increase is justified.
D) The product has moved into the decline stage of the PLC.

Question

Quizplus · Accepted Answer

At the point of intersection in a breakeven analysis, where total costs equal total revenues, profits are indeed zero, which also means that losses are zero since the company is neither making nor losing money at this point.

In a Breakeven Analysis, When the Total Cost Curve Intersects