Assuming a contribution margin of 25 percent and sales of $4 billion, with a 20 percent price

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Assuming a contribution margin of 25 percent and sales of $4 billion, with a 20 percent price increase, by how much can sales decrease before profitability (total contribution) drops below its current level? Refer to Financial Analysis of Marketing Tactics: Price Decrease in Appendix 2: Marketing by the Numbers to learn how to perform this analysis, but determine the maximum drop in sales before total contribution is negatively affected. (AACSB: Communication; Analytic Reasoning)

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Principles Of Marketing

ISBN: 9781292341132

18th Global Edition

Authors: Philip Kotler, Gary Armstrong

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