A small percentage improvement in price can generate a large percentage increase in profitability.

Question

Quizplus · Accepted Answer

This statement is true. A small increase in price can result in a significant increase in profit margin. For example, a 1% increase in price can lead to a 10% increase in profitability. This is because the increased price goes straight to the bottom line while the increase in costs is typically much lower than the increase in price. However, it's essential to keep in mind that customers may be sensitive to price, and raising prices too high may lead to a decrease in demand, resulting in lower revenue and profitability.

A Small Percentage Improvement in Price Can Generate a Large