Procter and Gamble sells Gillette razors near or below their manufacturing cost It also sells razor blades that have a relatively high contribution margin Explain why P G does not eliminate its unprofitable razor line and sell only blades ...

If the price of one good falls and people buy more of it they will usually buy more of the ...

Procter and Gamble sells Gillette razors near or below their manufacturing cost. It also sells razor blades

Question:

Procter and Gamble sells Gillette razors near or below their manufacturing cost. It also sells razor blades that have a relatively high . Explain why P & G does not eliminate its unprofitable razor line and sell only blades.
Contribution Margin
Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...