When Variable a Rises by 10 Units, Variable B Rises

question 194

Multiple Choice

When variable A rises by 10 units, variable B rises by 15 units.The slope of the line describing this relationship is

• A)always 2/3.
• B)either 2/3 or 1.5, depending on which variable goes on which axis of the graph.
• C)either 1.5 or −1.5, depending on which variable goes on which axis.
• D)always −1.5.

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Definitions:

Contribution Margin

The gap between income from sales and variable expenses, which is utilized to pay for fixed expenses and produce earnings.

Selling Price

Selling price is the amount a buyer pays to purchase a product or service from a seller.

Variable Cost

Costs that change in proportion to the level of goods or services produced, such as materials and labor costs.

Fixed Cost

Costs that do not change with the level of production or sales, such as rent, salaries, and insurance, providing predictability but fixed financial commitments.