The Excess of a Product's Selling Price Over Its Variable

question 189

Multiple Choice

The excess of a product's selling price over its variable costs is referred to as:

• A) gross profit
• B) gross margin
• C) contribution margin
• D) manufacturing margin

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Definitions:

Price Sensitivity

The degree to which the demand for a product or service is affected by changes in its price, illustrating consumer response to price adjustments.

Consumer Surplus

The contrast between what buyers are willing to offer for a good or service and the amount they actually spend.

Willingness to Pay

The maximum amount an individual is prepared to expend on a good or service to acquire it.