If a Company's Fixed Costs Were to Increase,the Effect on a Profit-Volume

question 100

Multiple Choice

If a company's fixed costs were to increase,the effect on a profit-volume graph would be that the

• A)contribution margin line would shift upward parallel to the present line.
• B)contribution margin line would shift downward parallel to the present line.
• C)slope of the contribution margin line would be more pronounced (steeper).
• D)slope of the contribution margin line would be less pronounced (flatter).

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Definitions:

Protectionism

Economic policy of restricting imports from other countries through methods such as tariffs and quotas, intended to protect domestic industries from foreign competition.

Infant Industries

New or emerging industries in a country that are protected by the government through subsidies or tariffs to promote growth.

Foreign Suppliers' Dumping

The practice where a company exports a product at a price lower than the price it normally charges in its own home market, often with the intention to undercut local markets or gain market share.

Comparative Advantage

An economic theory that describes how entities can gain and benefit from trade if they produce goods and services at a lower opportunity cost than their trade partners.