Identify a disadvantage of break-even analysis.
A) It cannot be used to determine the break-even point in dollars.
B) It is not helpful for evaluating what might happen to profits in different market environments.
C) It does not consider the effect of price on the quantity that consumers will want.
D) It is not helpful for evaluating alternatives.
E) It is an extremely complicated method.

Question

Quizplus · Accepted Answer

Break-even analysis assumes that the quantity sold is constant regardless of price changes, ignoring the impact of price on consumer demand.

Identify a Disadvantage of Break-Even Analysis