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A profit line for a business crosses the sideways axis at 40,000 units sold. What is true for sales below that figure?
AThe business is making its largest profit
BThe business breaks even at every amount
CThe business has no costs left to cover
DThe business is running at a loss there
Answer & Solution
Correct answer: D. The business is running at a loss there
1. The sideways axis marks a profit of zero, so the crossing is the break-even quantity.
2. To the left of that crossing the profit line sits below the axis, so profit is negative.
3. Negative profit means the business is losing money at those quantities.
4. Option B is only true at the single crossing point, not everywhere below it.
5. So sales below 40,000 units leave the business at a loss, option D.
_Source: OpenStax College Algebra (CC BY 4.0), Ch 7 "Systems of Equations and Inequalities", section 7.1 Systems of Linear Equations: Two Variables_
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