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Price change break-even volume
Find how much volume you can lose (or must gain) for a price change to keep the same gross profit.
Finance & unit economicsHow it's worked out
- Break-even volume change = −Δprice ÷ (contribution margin + Δprice)
- Variable cost per unit unchanged; elasticity constant over the range
NoteDiscounts on low-margin products need large volume gains to pay back. The elasticity line is only as good as the elasticity estimate.
Source: Nagle and Müller, The Strategy and Tactics of Pricing
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