Question

When the sales price per unit decreases, the breakeven point ________?

1) increases
2) decreases
3) remains the same
4) cannot be determined

Answer 1

When the sales price per unit decreases, the breakeven point increases.

Step-by-step explanation:

When the sales price per unit decreases, the breakeven point increases. This is because the breakeven point is the point at which total revenue equals total costs. When the sales price per unit decreases, the revenue generated from each unit sold decreases. As a result, the breakeven point increases, as more units need to be sold to cover the costs.