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Unformatted text preview: maintain or increase profitability, the price reduction must increase sales considerably. 1. Refer to Appendix 3, Marketing by the Numbers, and calculate the new contribution margin for the company discussed above if it reduces price by 10 percent. Assume that unit variable costs are $70 and the original price was $100. 2. What total sales must the company capture at the new price to maintain the same level of total contribution (that is, total contribution = $18 million)?...
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This note was uploaded on 01/18/2012 for the course JOMC 475 taught by Professor Heidihennink-kaminski during the Spring '11 term at UNC.
- Spring '11