Question: Both cost-efficiency and pricing strategies affect contribution margin, but pricing changes usually have a bigger impact on CM%. Still, cost savings help lower the baseline
Both cost-efficiency and pricing strategies affect contribution margin, but pricing changes usually have a bigger impact on CM%. Still, cost savings help lower the baseline variable costs and reduce risk. For a company like EGA, combining both strategies will likely provide the best protection against raw material price fluctuations and support long-term profitability.
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