Pricing strategy
Price increase impact.
Enter price, unit cost, volume, the increase and a price elasticity. See the new volume, revenue and profit, and how elastic demand can be before the increase backfires.
New volume = old volume x (1 - elasticity x price increase). Raising a $50 price to $55 on a $30 cost at an elasticity of 1.5 cuts volume 15%, so revenue falls $3,250 but profit still rises $1,250.
Your numbers
Result
Worked example
A product sells for $50, costs $30 and moves 1,000 units a period, so revenue is $50,000 and profit $20,000. A 10% increase takes the price to $55. At an elasticity of 1.5 the quantity falls 15% (1.5 x 10%) to 850 units. Revenue becomes $46,750 (down $3,250) but profit becomes 850 x $25 = $21,250, up $1,250. Profit only falls if elasticity is above 50 / (55 - 30) = 2.00; revenue is unchanged at an elasticity of 1 / 1.10 = 0.91.
How it works
Quantity change % = elasticity x price change %. That is the definition of price elasticity of demand rearranged, so the tool applies one elasticity to the whole move. Real demand curves bend, so treat the answer as an estimate for a modest change, not a forecast for a large one.
Break-even elasticity = old price / (new price - unit cost). Below it, profit rises; above it, profit falls. The revenue test is separate: revenue rises only if elasticity is under 1 / (1 + increase).
Elasticity is reported as a positive number here. A value under 1 is called inelastic and over 1 elastic. The inputs you choose decide the result, so run a low and a high elasticity side by side.
Sources and basis (opened 2026-10-08): 5.1 Price Elasticity of Demand and Price Elasticity of Supply - Principles of Economics 3e | OpenStax for the definition of elasticity and the elastic/inelastic cut-off at 1; 5.3 Elasticity and Pricing - Principles of Economics 3e | OpenStax for the rule that a price rise lowers total revenue when demand is elastic and raises it when demand is inelastic. The break-even formula is algebra on your inputs.
Results depend entirely on the elasticity you assume. This is educational arithmetic, not a forecast or financial advice. Everything runs in your browser. Nothing you type is sent or stored.
FAQ
How do I find the right elasticity to use?
Measure it from your own before-and-after sales with the price elasticity of demand calculator, or run a low and a high guess. This tool does not know your market, so the result is only as good as the elasticity you enter.
Can a price increase raise profit while revenue falls?
Yes. Selling fewer units also lowers your total costs, so profit can rise even when revenue drops. In the worked example revenue falls $3,250 while profit rises $1,250.
What elasticity makes a price increase a bad idea?
Any elasticity above old price divided by new price minus unit cost lowers profit. With a $50 price rising to $55 on a $30 cost, that limit is 2.00.