In the case of marginal analysis approach,profits are shown to be a result of:
A)advertising expenditure minus sales.
B)sales minus advertising expenditures.
C)gross margin minus advertising expenditures.
D)gross margin minus sales.
E)net worth minus sales.

Question

Quizplus · Accepted Answer

Marginal analysis approach shows that profits are a result of gross margin (revenue minus cost of goods sold) minus advertising expenditures. This approach focuses on analyzing the incremental costs and benefits of any decision, in this case, advertising expenditures, to determine the impact it has on profits. Therefore, the correct choice is C.

In the Case of Marginal Analysis Approach,profits Are Shown to Be