Service companies usually have high operational gearing. Then can we say their sales price is highly sensitive?
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Operational gearing
3y ago#1No. It is the profit that is more sensitive to changes in the revenue (and the revenue depends on both the selling price and the demand).
Discussion as to the sensitivity of the selling price relates to the extent to which demand will change with changes in the selling price, which is explained in my free lectures on pricing.
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