When Contribution Margin Per Unit Increases

question 14

Multiple Choice

When contribution margin per unit increases:

• A)break-even output remains the same.
• B)break-even output increases.
• C)break-even output decreases.
• D)fixed costs decrease.

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Definitions:

Dutch Auction

An auction mechanism where the price starts high and decreases until a bidder accepts the price, securing the sale.

Rational Bidders

Individuals who participate in auctions or bidding processes and make decisions based on maximizing their utility.

Common-Value Auction

In a common-value auction, all bidders have the same valuation for the auctioned item, but they may have different information about the item's actual value.

Private-Value Auction

An auction in which the value of the item being bid on is subjective and differs for each bidder, based on their private evaluation.