The highest contribution margin per scarce resource is the most profitable.

Question

Quizplus · Accepted Answer

Contribution margin is the difference between revenue and variable costs. Scarce resources are those resources that are limited in supply and have a higher demand than their availability. Therefore, if a product or service generates the highest contribution margin per scarce resource, it means that it is most profitable and utilizes the limited resources more efficiently. So, the statement is true.

The Highest Contribution Margin Per Scarce Resource Is the Most