The Excess of Sales Over Variable Costs Is Equal To

question 129

Multiple Choice

The excess of sales over variable costs is equal to:

• A) Gross margin
• B) Contribution margin
• C) Profit margin
• D) Net margin

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Definitions:

Complements

Goods or services that are typically consumed together, where the increase in the price of one leads to a decrease in demand for the other.

Linear Demand Curve

A graphical representation of demand where a straight line shows a constant relationship between quantity demanded and price.

Unit-Elastic

A situation in which a product's price elasticity of demand is exactly one, indicating that the change in quantity demanded is directly proportional to the change in price.

Elastic Inelastic

Elastic demand refers to a significant change in quantity demanded when the price changes, while inelastic demand indicates little to no change in quantity demanded despite price changes.