For Every Unit Sold, Both Contribution Margin and Profit Increase

question 55

True/False

For every unit sold, both contribution margin and profit increase at the same rate, by an amount equal to the unit contribution margin.

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Definitions:

Comparative Advantage

The capacity of a party to produce products or services with a lesser opportunity cost compared to others.

Opportunity Cost

The cost of the next best alternative foregone when making a decision.

Specialization

A focus on a narrow area of knowledge or skill, leading to greater efficiency and expertise in that area.

Farmer

An individual who engages in the act of agriculture, raising living organisms for food or raw materials.