Question

In: Accounting

If McDonald’s doubles the price of Big Mac, its gross profit from Big Mac should also...

If McDonald’s doubles the price of Big Mac, its gross profit from Big Mac should also double.

True or False?

Solutions

Expert Solution

This statement is false.
Reason: IF Mcdonald's doubles the price of big mac, its gross profit from big mac should be more than double, since variable cost per unit will remain same.


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