Enter your real numbers. This computes the profit-maximizing price from a proper demand model — either a price-elasticity you supply, or one it derives from two price/demand points you've observed. Every figure below is calculated from your inputs with the formulas shown in plain sight. No fabricated "results".
Contribution margin per unit today: $31.00 (63%).
A 1% price rise changes units sold by ε%. Typical ranges: sticky/essential −0.5 to −1; normal −1 to −2; very price-sensitive −2 to −4. Must be below −1 for a finite optimum.
Profit π(p) = (p − cost) × demand(p) across a price range. Dot = your current price; star = the optimum. The curve is drawn from the same demand model, not decoration.
| Price | Δ% | Units | Revenue | Profit | vs now |
|---|
Demand model. Constant-elasticity: Q(p) = Q₀ · (p / p₀)^ε. This is the standard iso-elastic demand curve — the same one used in economics textbooks for price optimization.
Profit. π(p) = (p − c) · Q(p), where c is unit cost.
Optimum (closed form). Maximizing π gives p* = c · ε / (ε + 1) — valid only when ε < −1 (elastic). If demand is inelastic (−1 < ε ≤ 0), profit rises without bound as you raise price, so no interior optimum exists and the tool tells you so instead of inventing a number.
Two-point elasticity. Given (Pₐ,Qₐ) and (P_b,Q_b): ε = ln(Q_b/Qₐ) / ln(P_b/Pₐ) — the slope of demand in log-log space.
Assumptions & limits: Constant-elasticity demand is a local approximation — most accurate near your current price; extrapolating far from it (or beyond the two points you entered) is less reliable. Unit cost is treated as constant per unit. The optimum ignores capacity limits, competitor reaction, and fixed costs (fixed costs don't change the profit-maximizing price, only the profit level). Use it to size the opportunity and direction, then test.
© Pricemaxxing. Real pricing math, no fabricated results.