Suppose the Contribution Margin Ratio Increases

question 20

Multiple Choice

Suppose the contribution margin ratio increases. What will be the effect on the break-even point in sales dollars?

• A) The dollar value will double.
• B) The dollar value will increase.
• C) The dollar value will decrease.
• D) The dollar value will remain the same.

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Definitions:

Economic Growth

The increase in the production of goods and services in an economy over a period of time.

Microeconomics

Microeconomics is the branch of economics that focuses on the actions of individuals and industries, like the dynamics between buyers and sellers, borrowers and lenders.

Rate Of Inflation

The pace at which the general level of prices for goods and services is rising, eroding purchasing power.

Macroeconomics

The branch of economics that studies overall economic factors, such as national productivity, total national income, and the overall levels of prices and employment.