Question

TRUE/FALSE: Breakeven Analysis can be used to evaluate price changes that involve changes in variable costs...

TRUE/FALSE: Breakeven Analysis can be used to evaluate price changes that involve changes in variable costs AND price changes that involve changes in incremental fixed costs.

TRUE/FALSE: Apple is a good example of a company that uses a market penetration pricing strategy.

TRUE/FALSE: The goal of market skimming is to capture high levels of sales with lower margins per unit.

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Answer #1

1. The given statement is TRUE as break even analysis is used for evaluation of the variable and fixed cost changes which has helped in determination of break even point and it will also help in production of additional quantity and decision making in respect to that.

2. The given statement is FALSE because Apple has always engaged in market skimming policy by charging higher price for its products.

3. Market skimming will always focus upon higher margin per unit and it is the the aim of market penetration to keep the margin low.

The given statement is FALSE.

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