Lesson 1.3.2d

1.3.2d Interpreting break-even diagrams Quiz: Pearson Edexcel Business, Unit 3

20 questions

Written by Revision Ninja · Last reviewed 11 October 2026

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Lesson 1.3.2d, Interpreting break-even diagrams: 20 multiple choice questions for the Pearson Edexcel GCSE Business (1BS0), Unit 3: Putting a business idea into practice, written with Revision Ninja.

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The 20 questions

  1. What happens to the break-even output level if fixed costs increase?

    • It increases
    • It decreases
    • It stays unchanged
    • It becomes zero

  2. What happens to the break-even point if the selling price rises?

    • Zero output
    • Higher output
    • No change
    • Lower output

  3. On a break-even diagram, the area above the break-even point and below the revenue line represents:

    • Loss
    • Profit
    • Variable costs
    • Fixed costs

  4. What does the area above total costs and left of break-even represent?

    • A loss
    • A profit
    • Margin of safety
    • Fixed cost

  5. What does a steeper total revenue line indicate on a diagram?

    • Lower fixed costs
    • Higher selling price
    • Higher variable costs
    • Lower sales volume

  6. What happens to the total cost line if variable costs per unit rise?

    • It becomes horizontal
    • It shifts downwards
    • It becomes flatter
    • It becomes steeper

  7. What is shown where total revenue and total cost lines cross?

    • Total fixed cost
    • Break-even point
    • Maximum profit
    • Margin of safety

  8. What does current sales well to the right of break-even suggest?

    • High profit
    • Zero profit
    • High fixed costs
    • High loss

  9. Which change would most likely reduce a business margin of safety?

    • Falling fixed costs
    • Rising sales
    • Higher selling price
    • Falling sales

  10. How does a fall in variable costs per unit affect the total cost line?

    • It shifts upwards
    • It becomes vertical
    • It becomes flatter
    • It becomes steeper

  11. What must a business do if its output currently generates a loss?

    • Exceed break-even output
    • Increase fixed costs
    • Lower selling price
    • Reduce output

  12. What is a primary use of a break-even diagram?

    • Calculating cash flow
    • Measuring market share
    • Designing new products
    • Analysing profit changes

  13. When does the break-even point shift to the right on a diagram?

    • Fixed costs fall
    • Variable costs fall
    • Selling price rises
    • Fixed costs rise

  14. What happens to the margin of safety if break-even output increases?

    • It stays constant
    • It becomes negative
    • It falls
    • It rises

  15. What key assumption applies to standard break-even diagrams?

    • Variable costs vanish
    • Sales volumes never change
    • Fixed costs are zero
    • Constant prices assumed

  16. What financial values are measured on the vertical axis of a break-even diagram?

    • Output units
    • Money
    • Percentage margin
    • Time periods

  17. What happens to profit if a business raises its price with constant sales?

    • Revenue drops
    • Profit is unchanged
    • Profit falls
    • Profit rises

  18. On a break-even diagram, what does the output level where total revenue equals total costs represent?

    • Break-even point
    • Total contribution
    • Maximum profit
    • Margin of safety

  19. What happens to the break-even point if variable costs per unit rise?

    • It decreases
    • It increases
    • It becomes zero
    • It remains unchanged

  20. On a break-even chart, what does the vertical gap between total revenue and total cost show?

    • Total contribution
    • Margin of safety
    • Fixed costs
    • Profit or loss

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