When demand is high and a scarce resource is in short supply, a company should decide how much of each product to produce by ranking products by the contribution margin per unit of the product.

Question

Quizplus · Accepted Answer

When demand is high and a scarce resource is in short supply, a company should decide how much of each product to produce by ranking products by the contribution margin per unit of the scarce resource, not per unit of the product. This ensures the most efficient use of the limited resource.

When Demand Is High and a Scarce Resource Is in Short