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An entrepreneur's sales rise but the profit margin falls. Which possible cause should be examined?

Answer and explanation

Correct answer: Higher discounts or rising costs

Sales revenue measures money received from selling, while profit margin considers what remains after costs. Larger discounts reduce revenue per unit, and higher material, labour, transport, or operating costs reduce profit per unit. Thus sales can rise while margin falls. The other choices do not directly explain this financial relationship. A is correct.

Related tags

Profit-MarginCost-AnalysisIntroduction To EntrepreneurshipEntrepreneurial Skills IArtificial IntelligenceClass 9 Mcq

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