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PROFIT IMPACT
Price has more profit leverage than volume or cost
Profit impact varies by EBIT margin:
1
A 1% price increase...
grows EBIT
by 20%
2
Revenue
Fixed Costs
Variable
Costs
EBIT
$100
$6
$5
$75
$20
$101
3
Improving each lever by 1% grows EBIT by:
Price
Variable
costs
Volume
Fixed
costs
20%
15%
5%
4%
"But what about lost volume?"
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