If there is an insufficient contribution margin to cover fixed expenses, there will always be an occurrence of a net loss.
<h3>What is a Contribution Margin?</h3>
The contribution margin can be expressed in gross income terms. After subtracting the variable element of the firm's expenditures, it indicates the extra money gained for each product sold.
The contribution margin is calculated by subtracting the selling price/unit from the variable cost/unit.
This metric displays how much a certain product adds to the company's total earnings. It displays the share of revenue that helps to pay the firm's fixed costs and gives one approach to illustrate the profit potential of a certain product supplied by a company.
Therefore, If there is an insufficient contribution margin to cover fixed expenses, there will always be an occurrence of a net loss.
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Answer:
The primary difference between those two concepts is focus that each term has. The first one focus on the relationship between the level of production and the level of return. While the second one focus on the relationship between the level of production and the amount of factors used for that production.
Explanation:
One the one hand, the law of diminishing marginal returns is a concept known in the microeconomics theory due to the fact that it establishes the relationship between the productivity and the income for every aspect of it. Meaning that, when the productivity increases because of the increase of only one factor of production then the income will start to slowly decrease, confirming that when only one factor is increased the production will start to be incomplete and the return will decrease for that.
On the other hand, the law of diminishing marginal rate of technical substitution indicates the relationship between the level of output and the different factor used to produce. Meaning that, it shows how to keep the level of output the same while making changes in the amount of factors used.
Answer:
D. You shop around and buy a pair of the exact same designer jeans at a thrift shop, and they cost virtually nothing.
Explanation:
Good money burn refers to the effective use of money, rather than just spending it on some useless stuff.
Here in the given instance the following is the explanation for the given instance:
Option A states that the jeans is just bought for completing the desire, it does not have any difference in the product even if the product can be bought on sale after some days.
Option B is still better than the first day.
Further in option c buying the jeans without any label might not be a good decision as it might have poor quality.
Option D is the best as it is the same jeans but at the least possible cost.
Answer:
(A)cannot be physically possessed
Explanation:
A service is any intangible offering that involves a deed, performance, or effort that cannot be physically possessed.
A service is a transaction in which no physical good is transferred to the buyer.
Some of the major properties of Services are:
- Intangibility
- Perishability
- Uniqueness
Examples of services are Education, Consultancy, Repair and maintenance services, Electricians, Plumbing
, Law enforcement (provides the service of identifying and apprehending criminals) etc.
