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If the price per unit decreases because of competition but the cost structure remains the same:________

A. the break-even point rises.
B. the degree of combined leverage declines.
C. the degree of financial leverage declines.
D. All of the options

User Imre
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Final answer:

If the price per unit decreases due to competition but the cost structure remains the same, the break-even point rises, the degree of combined leverage declines, and the degree of financial leverage declines.

Step-by-step explanation:

When the price per unit decreases due to competition but the cost structure remains the same, it can have several effects on the financial aspects of a business.

First, the break-even point rises because the firm needs to sell more units to cover its fixed costs with the lower price. Second, the degree of combined leverage declines as there is less contribution margin to cover the fixed costs. Lastly, the degree of financial leverage declines because the lower price reduces the firm's profitability and its ability to use financial leverage.

Therefore, the correct answer is Option D: All of the options.

User Gorcyn
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