Assuming all other things are equal, fixed costs must have ____ if there was a decrease in the break-even point.
A)remained the same
B)increased first, then decreased
C)increased
D)decreased

Question

Quizplus · Accepted Answer

If the break-even point decreases, it means that the business needs to sell fewer units to cover all its costs. This can only be achieved by decreasing variable costs or fixed costs. Assuming variable costs remain constant, it means that fixed costs must have decreased to allow for a lower break-even point.

Assuming All Other Things Are Equal, Fixed Costs Must Have