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What is the primary purpose of margins in a business context?

• To complicate financial statements

• To increase the overall cost

• To reduce expenses

• To ensure profitability

Which of the following is a common method for calculating margins?

• Multiplying expenses by revenue

• Adding expenses to revenue

• Subtracting expenses from revenue

• Dividing expenses by revenue

In which scenario would a company most likely adjust its margins?

• When updating software

• When changing office locations

• When hiring new employees

• When launching a new product

How do margins affect pricing strategies?

• They increase the cost of production

• They determine the minimum price point

• They reduce the quality of products

• They have no effect on pricing

What is a potential outcome of not managing margins effectively?

• Improved customer satisfaction

• Financial losses

• Enhanced brand reputation

• Increased market share