A business should always continue to operate as long as its revenue exceeds its fixed costs, regardless of variable costs. True or False?

The statement is false. A business needs to consider both fixed and variable costs to make smart financial decisions. Fixed costs are expenses that do not change with the level of production, like rent or salaries, while variable costs fluctuate based on how much a business produces, such as materials and labor. If a company's revenue only covers fixed costs but not variable costs, it may still be losing money overall. For example, if a bakery has fixed costs of $1,000 and variable costs of $500 but only makes $1,000 in revenue, it is not making enough to cover all expenses and should reconsider continuing operations.