Total contribution margin will increase in a two-product firm if total units sold remain the same and:

Question

Quizplus · Accepted Answer

If more products with the highest contribution margin are sold, the overall contribution margin will increase as those products generate more revenue per unit sold. The total units sold remaining the same means that there is no increase in variable costs, so the increase in revenue directly translates to an increase in contribution margin.

Total Contribution Margin Will Increase in a Two-Product Firm If