If a product becomes cheaper, does the profit decrease?
Answer by Drew Steig – Quoras Own Start Up & Small Business Guru
Answer originally posted on Quora.Com
It can, lowering price to increase volume of sales can be effective. Sometimes it backfires, other times profit per item is lowered, while overall profits rise. The other side is that as a company grows, it begins to automate, and purchase in bulk for lower prices, and cost of production lowers so it can lower prices while keeping profits the same or even higher.