The Slope of the Consumption Function Is

question 91

Multiple Choice

The slope of the consumption function is

• A) equal to the MPC and is equal to 1.
• B) equal to the MPC and is greater than 1.
• C) equal to the MPC and is less than 1.
• D) not equal to the MPC and is less than 1.
• E) not equal to the MPC and is equal to 1.

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Definitions:

Variable Selling Expenses

Selling expenses that fluctuate with sales volume, such as commissions and shipping fees.

Contribution Margin

The amount by which a product's selling price exceeds its total variable cost, indicating how much contributes to covering fixed costs and generating profit.

Variable Selling Expense

Costs that vary directly with the volume of sales, such as commissions or shipping fees.

Fixed Selling Expense

Expenses that remain constant regardless of the volume of goods or services sold, such as salaries and rent for the sales department.