Final answer:
When a company raises the price of a product without changing costs, both the unit contribution margin and contribution margin ratio increase because the selling price per unit increases while the variable cost per unit remains unchanged.
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 as the selling price per unit minus the variable cost per unit. Since the selling price per unit has increased while the variable cost per unit remains unchanged, the difference between the two, which is the unit contribution margin, will be larger.
Similarly, the contribution margin ratio, which is the unit contribution margin divided by the selling price per unit, will also increase. An increase in the selling price per unit, with no change in the variable cost per unit, means that the numerator of this ratio goes up, while the denominator increases as well - but since the numerator's absolute increase is larger (as it includes the entire price increase), the ratio as a whole goes up.
Therefore, the correct answer is B. Both the unit contribution margin and the contribution margin ratio will increase.