----- Original Message -----
From: Nicola King <[log in to unmask]>
To: <[log in to unmask]>
Sent: Saturday, October 06, 2001 4:01 PM
Subject: AQA Business, A2 Finance Module
> Can anyone help a new teacher understand/teach effectively the
> between the gross and net profit margins? Specification says: eg, how a
> price cut could cut gross yet boost net. My own thoughts seem
> convoluted/far fetched. Does anyone have a good example?
A price cut will automatically reduce the gross margin. However, if the
demand for the prodcuts is highly elastic, the increase in revenue may well
result in an increase in the net margin.