A Company Sells Three Different Products

question 48

Multiple Choice

A company sells three different products.The first costs $8 and sells for $16,the second costs $18 and sells for $45,while the third costs $36 and sells for $120.

• A)The gross profit percentages on the individual products are 50%,60%,and 70%,respectively.
• B)The third product is the highest margin good.
• C)If the company can persuade some customers to switch to the third product,overall gross profit percentage will increase.
• D)All of the answers are acceptable.

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Definitions:

Saving And Investment

The act of foregoing current consumption to put resources into assets or projects expected to generate future benefits or returns.

Loanable Funds

A term used in economics to describe the market where savers supply funds to borrowers, typically characterized by the interest rate.

Saving

The act of setting aside a portion of current income for future use, which could involve depositing money into bank accounts or investing in financial products.

Investment

Assigning funds with the anticipation of creating income or achieving financial gain.