The Optimal Price Calculator is an innovative tool designed for businesses and entrepreneurs who aim to maximize their profits by finding the most advantageous selling price for their products or services. This user-friendly calculator streamlines the complex process of price optimization, ensuring that you are not leaving money on the table while maintaining competitive pricing.
If you want to use this maximum profit calculator to determine the optimal price, you need to provide it with the following values:
Marginal cost: this is the cost of producing one additional unit of your product. Typically, this cost is lowered with every item produced.
Marginal revenue: revenue generated by selling one additional unit. For an optimal price, the marginal revenue is equal to the marginal cost.
Initial price and quantity: the initial behavior of the sales process – the price at which you sold the product and the amount that you managed to sell.
Final price and quantity: the product's price after a price change and the corresponding demand.
Based on this input, our optimal price calculator will estimate these results:
Price elasticity of demand: the optimal price is highly dependent on the elasticity of demand. In short, this value describes the relationship between price and demand for a particular product.
the price at which you should sell your product. We can calculate it with the following formula:
OP = MC × (PED / (PED + 1))
is the optimal price, MC
is the marginal cost, and PED
stands for price elasticity of demand.