Questions: José and Laura have determined that the break-even point for their educational toys business is 60,000 units per month. Any units that José and Laura sell above 60,000 represent A. diminishing returns B. escalating costs C. additional costs D. diminishing revenues E. profits

The answer is the fifth one (or E): profits.

Explanation for each option: A. Diminishing returns - This concept refers to the point at which the level of profits or benefits gained is less than the amount of money or energy invested. It is not applicable here because selling more units above the break-even point does not imply diminishing returns. B. Escalating costs - This would imply that costs are increasing as more units are sold, which is not the case here. Above the break-even point, the costs are already covered, and additional units sold would not necessarily lead to escalating costs. C. Additional costs - This is incorrect because the break-even point means that all costs (fixed and variable) are already covered. Selling more units would not incur additional costs beyond the variable cost per unit. D. Diminishing revenues - This would imply that the revenue per unit decreases as more units are sold, which is not the case here. The revenue per unit remains constant. E. Profits - This is correct because once the break-even point is reached, any additional units sold contribute to profits. The costs are already covered, so the revenue from additional units sold above 60,000 units will be profit.

Summary: José and Laura have determined that the break-even point for their educational toys business is 60,000 units per month. Any units that José and Laura sell above 60,000 represent profits.