If ingredient cost rises but price is not changed in a food enterprise, what is the risk?

Correct answer: Profit margin may decrease

When ingredient cost increases, the cost of producing each food item rises. If the selling price remains unchanged, the difference between selling price and cost becomes smaller, so the profit margin may decrease. Food safety, customer complaints, and shelf life do not automatically change because the price is unchanged. Exam tip: Remember that profit margin depends on the gap between selling price and total cost.