Discussion
At the break-even point, total contribution equals
Answer: B
Correct answer: total fixed cost
Break-even is defined as the point where profit is zero, and profit is total contribution less fixed cost, so at that point the two are equal. Below it the contributions have not yet paid for the fixed cost and the firm makes a loss; above it every further contribution is profit. This is the single most useful way to hold the whole method in mind.
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