A Business That Is Able to Build a Higher Level

question 16

True/False

A business that is able to build a higher level of customer retention can be more profitable than another business,even when both have the same market share.

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Definitions:

Variable Costs

Expenditures that fluctuate in alignment with production levels or sales figures.

Contribution Margin

The amount remaining from sales revenue after variable costs have been deducted, indicating how much revenue is contributing to fixed costs and profit.

Margin Ratio

A financial metric that compares a company's gross profit margin to its revenue, indicating the percentage of sales revenue that remains after accounting for the cost of goods sold.

Contribution Margin

The amount by which product sales revenue exceeds variable costs, showing how much contributes to covering fixed costs and generating profit.