Which of the Following Must Be True

question 173

Multiple Choice

Which of the following must be true?

• A)The higher the profit margin on sales ratio the better.
• B)Too high of a profit margin on sales ratio may mean the company is charging too much for its goods.
• C)The profit margin on sales ratio is greater than the gross profit ratio of a company.
• D)If a company's gross profit ratio is greater than 10% than its profit margin on sales ratio must also be greater than 10%.

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Definitions:

Short-Run Supply Curve

A graphical representation that shows the quantity of goods a firm is willing and able to produce and sell at different price levels over a short period, not allowing for all factors of production to vary.

MC Curve

The Marginal Cost curve, which shows the increase in total cost that arises from producing one more unit of a good or service.

Short-Run Supply Schedule

A graphical or tabular representation of the quantity of goods a firm is willing and able to supply at different price points, over a short period.

Total Profit

The net amount of money a business retains after subtracting all its expenses, taxes, and costs from its total revenue.