Final answer:
If a company raises the price of a product with no change in costs, the unit contribution margin and contribution margin ratio will both increase.
Step-by-step explanation:
If a company raises the price of a product with no change in costs, the unit contribution margin and contribution margin ratio will both increase. The unit contribution margin is calculated by subtracting the variable costs per unit from the selling price per unit, and the contribution margin ratio is calculated by dividing the unit contribution margin by the selling price per unit. When the selling price per unit increases, while the costs remain the same, both the unit contribution margin and the contribution margin ratio will increase.
Upon increasing the product's price with no change in costs, both the unit contribution margin and contribution margin ratio will increase.
If a company raises the price of a product with no change in costs, the unit contribution margin (the difference between the selling price per unit and the variable cost per unit) and contribution margin ratio (the unit contribution margin divided by the selling price) will both increase. This is because raising the price increases the difference between the price and the variable cost per unit, assuming the variable cost per unit remains constant. The higher selling price results in a higher contribution per unit sold, and hence, a higher contribution margin ratio.