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If by Dropping a Product a Firm Can Avoid More

question 148

True/False

If by dropping a product a firm can avoid more in fixed costs than it loses in contribution margin,then the firm is better off economically if the product is dropped.


Definitions:

Flowering Plant

Plants belonging to the group Angiosperms, characterized by bearing flowers and producing seeds enclosed within a fruit.

Lignin

A complicated organic molecule found in the cell walls of numerous plants, contributing to their stiff and woody nature.

Cellulose

A complex carbohydrate that forms the primary structural component of plant cell walls and is indigestible to humans.

Xylem

The plant's vascular system responsible for transporting water and dissolved nutrients from the roots throughout the rest of the plant.

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