If the selling price falls and input costs are fixed, profit margins will increase.

Name: If the selling price falls and input costs are fixed, profit margins will increase.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

If the selling price falls and input costs are fixed, profit margins will decrease. This is because the revenue generated from each unit sold will be less, while the cost to produce each unit remains the same. Therefore, the difference between the revenue and cost (i.e. the profit margin) will decrease.

If the Selling Price Falls and Input Costs Are Fixed