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What should a firm faced with a production constraint do to maximize total contribution margin? Question 14Answera.Promote those products having the highest contribution margin per unit of constrained resourceb.Promote those products having the highest contribution margin ratiosc.Promote those products having the lowest contribution margin per unit of constrained resourced.Promote those products having the highest unit contribution margins

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What should a firm faced with a production constraint do to maximize total contribution margin? Question 14Answera.Promote those products having the highest contribution margin per unit of constrained resourceb.Promote those products having the highest contribution margin ratiosc.Promote those products having the lowest contribution margin per unit of constrained resourced.Promote those products having the highest unit contribution margins

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Solution

The firm should promote those products having the highest contribution margin per unit of constrained resource. This is because when a firm is faced with a production constraint, it means that there is a limit to the amount of resources available for production. Therefore, to maximize total contribution margin, the firm should focus on producing and promoting those products that provide the highest contribution margin per unit of the constrained resource. This will ensure that the firm gets the maximum return from the limited resources available.

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Similar Questions

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