An increase in gross margin over time could indicate what about the firm:
A) It has been able to reduce its costs compared to sales
B) It has been able to raise prices
C) It has been able to achieve a combination of (a) and (b)
D) It was forced to lower its prices
E) a, b, or c

Question

Quizplus · Accepted Answer

An increase in gross margin over time could indicate that the firm has been able to reduce its costs relative to sales, raise prices, or achieve a combination of both. Lowering prices would typically not lead to an increase in gross margin, making options A, B, and C all possible reasons for the observed increase, hence E is correct.

An Increase in Gross Margin Over Time Could Indicate What