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Business

Pricing Power Calculator

Model how a price increase changes profit when volume falls — enter the price, cost, sales, increase, and expected volume decline.

Your numbers

Results update as you type. No calculate button. All calculations run locally in your browser.

Change in profit

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New price: —New profit: —

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Breakdown

Amount

The volume decline is the decline you expect, entered directly — it is not predicted from an elasticity coefficient. See the FAQ for how the source scenario labels this input.

At a glance

Bars are scaled to the larger profit. A shorter new-profit bar means the increase loses money despite the higher price.

Profit change at different volume declines

Volume declineChange in profit

Price, cost, sales, and the price increase are held at the values above; only the volume decline changes across rows.

Formula

New price = price × (1 + increase%). New volume = sales × (1 − volume decline%). New profit = (new price − cost) × new volume. Current profit = (price − cost) × sales. Profit change = new profit − current profit.

Worked example

Price $199, cost $110, sales 1,000 units, increase 8%, volume decline 5%: new price = $199 × 1.08 = $214.92, new volume = 1,000 × 0.95 = 950 units, new profit = ($214.92 − $110) × 950 = $99,674, current profit = ($199 − $110) × 1,000 = $89,000, so profit rises by $10,674.

Scope and limitations

Unit cost stays constant and the volume decline is entered by you, not predicted. Fixed costs, competitor responses, customer switching over time, and demand shifts are not modeled — treat the result as a scenario comparison, not a forecast.

FAQ

How is this calculated?

Profit change = (price × (1 + increase%) − cost) × sales × (1 − volume decline%) − (price − cost) × sales. The new margin per unit times the new volume, minus today's profit.

What does the volume decline input mean?

The percentage of sales volume you expect to lose after the increase, entered directly. The source scenario labels this field elasticity, but the formula uses the entered percentage itself as the decline — it does not multiply an elasticity coefficient by the price increase.

Can a price increase lose money?

Yes. If the volume lost outweighs the extra margin per unit, new profit falls below current profit. That is exactly the trade this calculator exposes.

Why is unit cost held constant?

Volume changes can move unit cost in reality, but this model isolates the price-volume trade. If your unit cost changes with volume, adjust the cost input and compare scenarios.

What about fixed costs?

They cancel out of the change: both scenarios bear the same fixed costs, so the difference in profit is driven by unit margin and volume alone.

Should I use this as a pricing decision on its own?

No. Combine it with customer research, competitor pricing, and a margin check — the volume decline you enter is the most uncertain input, so test several values.

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Results are estimates only and do not constitute professional advice.