According to Penrose, the Set of Opportunities a Firm Feels

question 65

Multiple Choice

According to Penrose, the set of opportunities a firm feels it is capable of pursuing is referred to as the:

• A) creative field of potential
• B) productive opportunity set
• C) prolific potential
• D) passionate opportunity set
• E) dynamic opportunity options

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Definitions:

Contribution Format

Contribution format is an income statement format that separates costs into fixed and variable categories, highlighting the contribution margin of goods or services sold.

Contribution Margin

The amount by which sales revenue exceeds variable costs. It represents the portion of sales that helps to cover fixed costs.

Contribution Format

A type of income statement where costs are classified as variable or fixed, and the contribution margin is computed by subtracting total variable costs from sales.

Contribution Margin

The difference between total sales revenue and total variable costs, used to cover fixed costs and generate profit.