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The break-even point between two alternatives is the output at which their

  • A.contributions are zero
  • B.total costs are equal
  • C.fixed costs are equal
  • D.variable costs are equal

Answer: B

Below that output the alternative with the lower fixed cost is the cheaper, and above it the one with the lower variable cost per unit. It is also called the cost indifference point, since either choice costs the same there.

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