A Firm Is Experiencing an Increase in Variable Costs

question 33

Multiple Choice

A firm is experiencing an increase in variable costs.What can the firm do to maintain its profitability?

• A)Raise its price to increase its contribution margin.
• B)Lower its price to gain a greater market share.
• C)Increase its fixed costs to balance out its increased variable costs.
• D)Decrease its fixed costs to breakeven sooner.

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Definitions:

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A psychoactive drug from the Cannabis plant used for medical or recreational purposes, known for its sedative and mood-altering effects.

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A powerful, highly addictive stimulant that affects the central nervous system, known for its use as an illicit drug.