On the crossover chart where the costs of two or more location alternatives have been plotted, the quantity at which two cost curves cross is the quantity where:
A) fixed costs are equal for two alternative locations.
B) variable costs are equal for two alternative locations.
C) total costs are equal for all alternative locations.
D) fixed costs equal variable costs for one location.
E) total costs are equal for two alternative locations.

Question

Quizplus · Accepted Answer

The crossover point is where the total costs are equal for two alternative locations. This is important because it shows where one location becomes more cost-effective than another, and helps in making a decision on which location to choose.

On the Crossover Chart Where the Costs of Two or More