If a firm's fixed operating costs decrease, the firm's ________.
A) operating breakeven point will decrease
B) operating breakeven point will increase
C) sale price per unit will decrease
D) sale price per unit will increase

Question

Quizplus · Accepted Answer

Fixed operating costs are a part of the overall breakeven analysis, and a decrease in fixed costs will result in a decrease in the overall breakeven point. In other words, the firm will need to sell fewer units to cover its fixed costs and reach the breakeven point, making it easier to turn a profit. This will not affect the sale price per unit.

If a Firm's Fixed Operating Costs Decrease, the Firm's ________