Question

Pursuing a bigh volume low orice marketing strategy will ALWAYs result in lower Total Contribution Margin that a low volume high orice marketing strategy.

a.True
b.False

Answer 1

The statement is false. Pursuing a high volume low price marketing strategy does not always result in lower Total Contribution Margin compared to a low volume high price marketing strategy.

Step-by-step explanation:

The statement is false. Pursuing a high volume low price marketing strategy does not always result in lower Total Contribution Margin compared to a low volume high price marketing strategy.

Total Contribution Margin is the difference between the total revenue generated from sales and the total variable costs incurred. It indicates the amount of contribution from each unit sold towards covering fixed costs and generating profits.

In certain cases, a high volume low price strategy can lead to higher Total Contribution Margin. For example, if the higher volume of sales results in economies of scale, which reduces the production costs per unit, it can lead to a higher margin even with lower prices.