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Price Decrease Calculator
Model a permanent price cut: revenue and profit at forecast volume, required uplift to stay even, and the break-even units that keep the cut profitable.
Price Cut Inputs
Current Price ($)
New Lower Price ($)
Current Units
Unit Cost ($)
Forecast Units at New Price
Price Cut Impact
Price Cut12.0% ($100.00 to $88.00)
Current Profit$54000.00
Forecast Profit$49500.00
Profit Change$-4500.00
Break-Even Units (36% uplift)1636 units
Price-cut verdict: The cut needs 1636 units (36% uplift) to hold profit. Your forecast of 1500 units falls short: expect lower profit unless elasticity beats history.
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Authoritative References
Frequently Asked Questions
How do you calculate the impact of a price decrease?
New Profit = (New Price - Unit Cost) x Forecast Units versus Current Profit = (Current Price - Cost) x Current Units. The cut pays only when forecast volume clears break-even units.
How many extra units must a price cut generate?
Break-Even Units = Current Profit / (New Price - Unit Cost). A $54,000 current profit with $33 new contribution needs 1,637 units — a 36% uplift on 1,200 units.
What is price elasticity and why does it matter?
Elasticity measures how much volume responds to price: % change in quantity / % change in price. Elastic categories (apparel, gadgets) reward cuts; inelastic ones (essentials, luxury) punish them.
When should you permanently cut prices?
When unit costs fell durably, when volume gains compound (subscriptions, consumables), or when a lower price unlocks a far bigger segment. Never cut permanently for a temporary traffic dip.
How should you announce a price decrease?
Frame it as new everyday value, not a sale — update comparisons, bundles, and ads together. A quiet cut looks like weakness; a positioned cut looks like scale passed to customers.