All Else Being Equal,what Happens to the Unit Contribution Margin

question 83

Multiple Choice

All else being equal,what happens to the unit contribution margin and the contribution margin ratio if the sales price per unit increases?

• A)Both unit contribution margin and contribution margin ratio increase.
• B)Both unit contribution margin and contribution margin ratio decrease.
• C)Unit contribution margin increases while contribution margin ratio decreases.
• D)Unit contribution margin decreases while contribution margin ratio increases.

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Definitions:

Purely Competitive

Describes a market structure where many sellers offer identical products, and no single seller can influence the market price.

Concentration Ratio

A measure used in economics to assess the degree of market concentration by summing the market shares of the top firms in the industry.

Market Share

The proportion of total sales or business that a company or product secures within a particular market.

Industry

A sector of the economy characterized by the production or processing of similar goods or services.