All other things equal, the margin of safety in a company with high fixed costs and low variable costs will tend to be higher than the margin of safety in a similar company that has low fixed costs and high variable costs.

True or false?

True

Explanation:

The margin of safety describes the difference between actual sales and break even sales,it can also be seen as the difference between the intrinsic value of a commodity and its actual market value. the higher the fixed cost with a corresponding low variable cost the higher the margin of safety a company would have with other things been equal

But the lower the fixed cost with a corresponding high variable cost the lower the margin of safety a company will have. with other things been equal

The margin of safety is used to know how profitable a commodity would be and also to measure the level at which market factors like deflation  would affect its performance in the open market

staple goods and impulse goods are examples of convenience products which consumers usually  buy. these products can be bought almost everywhere and are readily available for purchase. usually, the quality and price of the product are not considered. examples of staple goods are sugar and bread, while impulse goods examples are chocolates and magazine.