Which of the Following Statements Is True

question 75

Multiple Choice

Which of the following statements is true?

• A)When a firm lowers the price of its product, total revenue always falls.
• B)When a firm raises the price of its product, total revenue always rises.
• C)When a firm raises the price of its product, total revenue always falls.
• D)When a firm lowers the price of its product, total revenue always rises.
• E)none of the above

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Definitions:

Gross Margin

The difference between the revenue generated from sales and the cost of goods sold, representing the profit made before accounting for operating expenses.

Operations

Operations refer to the day-to-day activities involved in the running of a business for the purpose of producing value for the stakeholders.

Variable Costing

An accounting method that includes only variable production costs in the cost of goods sold, excluding fixed factory overhead.

Absorption Costing

An accounting method that assigns all manufacturing costs, including both fixed and variable, to products, fully capturing the cost of production.