If the Total Contribution Margin Decreases and Fixed Costs Do

question 53

Multiple Choice

If the total contribution margin decreases and fixed costs do not change, pretax profit

• A) Decreases by an equal amount
• B) Increases by an equal amount
• C) Does not change
• D) Increases by some other amount

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Definitions:

Imports

Goods and services purchased from other countries.

Services

Intangible products provided to consumers, which can include everything from legal advice to entertainment.

Producer Surplus

The difference between what producers are willing to accept for a good or service versus what they actually receive, typically represented by the area above the supply curve and below the market price.

Consumer Surplus

The variance between the amount consumers are inclined to pay for a good or service and what they actually pay.