If Unit Variable Cost Is Reduced and Selling Price and Fixed

question 46

Short Answer

If unit variable cost is reduced and selling price and fixed cost remain the same, then: a. Contribution margin will decrease.
B) Contribution margin will remain the same.
C) Sales volume will increase
D) Sales volume will decrease.
E) Overall profit will increase.

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Definitions:

GDP

Gross Domestic Product, the total value of all goods and services produced within a country in a given period, a primary indicator of economic health.

GATT Agreement

The General Agreement on Tariffs and Trade; a legal agreement between many countries whose overall purpose was to promote international trade by reducing or eliminating trade barriers such as tariffs or quotas.

WTO

The World Trade Organization, an international body that deals with the rules of trade between nations, aiming to ensure that trade flows smoothly, predictably, and freely.

Trade Barriers

Restrictions imposed by a government on international trade, such as tariffs, quotas, and import bans, to protect domestic industries.