In the graph below,the area between the lines AC and OB to the right of point E represents ________.
A) fixed costs
B) breakeven point
C) operating loss
D) operating income

Question

In the graph below,the area between the lines AC and OB to the right of point E represents ________. 
A) fixed costs 
B) breakeven point 
C) operating loss 
D) operating income

Quizplus · Accepted Answer

The area between the lines AC and OB to the right of point E represents operating income because it represents the profits made by the company when their revenue exceeds their variable and fixed costs. The breakeven point is where the revenue equals the total costs (fixed and variable), which is not represented in this particular graph. Operating loss would be represented by the area to the left of point E where the costs exceed the revenue. Fixed costs are not represented by a specific area on this graph.

In the Graph Below,the Area Between the Lines AC and OB