When companies sell multiple products, prices are set to ensure that all products have the same contribution margin.

Question

Quizplus · Accepted Answer

Prices are not necessarily set to ensure that all products have the same contribution margin. Prices may be set based on market demand, production costs, competitor pricing, and other factors. The contribution margin may vary by product, but the overall profitability of the company is what matters.

When Companies Sell Multiple Products, Prices Are Set to Ensure