Figure 5-4 -In Figure 5-4, the Rightward Shift in Budget Lines from in Budget

question 109

Multiple Choice

Figure 5-4

-In Figure 5-4, the rightward shift in budget lines from the one containing point A to the one containing point B

• A)resulted from equal price reductions in beer and wine.
• B)resulted from an increase in the consumer's income.
• C)could have been caused by income or price changes.
• D)All of the answers above are correct possibilities.
• E)None of the above is correct.

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Definitions:

Contribution Margin

The amount remaining from sales revenue after variable expenses have been deducted, indicating how much contributes to fixed expenses and profit.

Selling Price

The amount for which a product is sold, determined by considering costs, market demand, competition, and other factors.

Relevant Range

The range of activity within which assumptions about variable and fixed cost behaviors are valid for management decisions.

Contribution Margin

The portion of sales revenue that exceeds variable costs, serving to cover fixed expenses and contribute to profits.