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Answer :
To determine which pair of costs and revenues could a company have if it is at its break-even point, we need to understand what a break-even point is. The break-even point is the point at which total revenues equal total costs, meaning the company is not making a profit or a loss.
Let's look at the given pairs of costs and revenues:
Option A: Costs of [tex]$6000 and revenues of $[/tex]6000
- In this option, the costs equal the revenues ([tex]$6000 = $[/tex]6000).
- This means the company is at its break-even point since there is no profit or loss.
Option B: Costs of [tex]$5000 and revenues of $[/tex]6000
- Here, the revenues ([tex]$6000) are greater than the costs ($[/tex]5000).
- This means the company is making a profit of [tex]$1000 and not at its break-even point.
Option C: Costs of $[/tex]5000 and revenues of [tex]$7000
- In this option, the revenues ($[/tex]7000) are also greater than the costs ([tex]$5000).
- This implies that the company is making a profit of $[/tex]2000, so it is not at its break-even point.
Option D: Costs of [tex]$6000 and revenues of $[/tex]7000
- Here, the revenues ([tex]$7000) are greater than the costs ($[/tex]6000).
- This indicates the company is making a profit of [tex]$1000 and is not at its break-even point.
Given these evaluations, the pair of costs and revenues that shows the company at its break-even point is:
Option A: Costs of $[/tex]6000 and revenues of $6000.
Let's look at the given pairs of costs and revenues:
Option A: Costs of [tex]$6000 and revenues of $[/tex]6000
- In this option, the costs equal the revenues ([tex]$6000 = $[/tex]6000).
- This means the company is at its break-even point since there is no profit or loss.
Option B: Costs of [tex]$5000 and revenues of $[/tex]6000
- Here, the revenues ([tex]$6000) are greater than the costs ($[/tex]5000).
- This means the company is making a profit of [tex]$1000 and not at its break-even point.
Option C: Costs of $[/tex]5000 and revenues of [tex]$7000
- In this option, the revenues ($[/tex]7000) are also greater than the costs ([tex]$5000).
- This implies that the company is making a profit of $[/tex]2000, so it is not at its break-even point.
Option D: Costs of [tex]$6000 and revenues of $[/tex]7000
- Here, the revenues ([tex]$7000) are greater than the costs ($[/tex]6000).
- This indicates the company is making a profit of [tex]$1000 and is not at its break-even point.
Given these evaluations, the pair of costs and revenues that shows the company at its break-even point is:
Option A: Costs of $[/tex]6000 and revenues of $6000.
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