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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...
$101
grows EBIT
by 10%
2
$11
$100
$10
$70
$20
Revenue
Fixed Costs
Variable
Costs
EBIT
3
Improving each lever by 1% grows EBIT by:
Price
Variable
costs
Volume
Fixed
costs
10%
7%
3%
2%
"But what about lost volume?"
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