Profit alone
Blank
______ how many units should be sold before a firm breaks even.

Question

Profit alone 
Blank
______ how many units should be sold before a firm breaks even.

BlackTom AI · Accepted Answer

To begin, let's restate the task in full: Profit alone _____ how many units should be sold before a firm breaks even, with four possible completions to choose from.
Option 1: 'does illustrate' — This would claim that profit by itself shows the exact break-even quantity. In standard cost-volume-profit analysis, profit alone does not reveal the break-even point because the break-even quantity depends on fixed costs, unit contribution margin, and price. A single profit figure omits these components, so this statement is inaccurate.
Option 2: 'calculates' — Saying profit alone calculates the break-even quantity would be incorrect for similar reasons: the calculation requires unit contribution, fixed costs, and price information. Profit is a result, not the input, so profit cannot by itself perform the calculation.
Option 3: 'indicates' — This would imply profit provides some signal about break-even, but it only shows the outcome after costs and revenues are considered. Without the underlying cost structure and contribution margins, profit does not reliably indicate the break-even point. Hence this option is not correct.
Option 4: 'does not indicate' — This aligns with the idea that profit alone does not tell us how many units are needed to break even; you need additional data such as fixed costs and per-unit contribution margin to determine the break-even quantity. This is the most accurate characterization among the choices.
In summary, each of the first three options assigns a calculative or informative role to profit that it does not possess in isolation, whereas the fourth option correctly states that profit alone does not indicate the break-even quantity. The reasoning here hinges on understanding that break-even analysis requires both cost structure and sales information, not just the profitability outcome.

Profit alone Blank ______ how many units should be sold before a firm breaks even.

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