Discussion
Match the change with its effect on the break-even quantity.
1. Fixed cost rises 2. Selling price rises 3. Variable cost per unit rises
P. Falls Q. Rises, the cost line shifting up R. Rises, the cost line steepening
Answer: C
Correct answer: 1-Q, 2-P, 3-R
The three changes act differently on the chart. A rise in fixed cost lifts the whole cost line without changing its slope, so the crossing moves right. A rise in selling price steepens the revenue line, so the crossing moves left and the break-even falls. A rise in variable cost per unit steepens the cost line, so the crossing again moves right - the same direction as a fixed cost rise but by a different mechanism.
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