EMPERIO Marketing Lab
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Choose a cookware price in Indore

Indore, Madhya Pradesh · Fictional practice case

The decision

A seller charges ₹900 and sells 1,000 monthly units with ₹540 variable cost. A ₹990 option is projected to sell 850 units. Monthly fixed cost is ₹2.5 lakh.

Which price is more profitable, and where does the choice reverse?

Worked solution

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Case at a glance
₹900 option · ₹1.1 lakh profit. ₹990 option · ₹1.325 lakh profit. Break-even versus baseline · 800 units
  1. Base profit is (₹900 − ₹540) × 1,000 − ₹2.5 lakh = ₹1.1 lakh. New profit is ₹450 × 850 − ₹2.5 lakh = ₹1.325 lakh.
  2. At the new margin, 800 units match baseline contribution. The observed forecast implies base-period elasticity of −15% ÷ 10% = −1.5.
  3. Pilot the new price and compare retained volume and refunds. Revert if sustained unit volume falls below 800 and no other economics change.

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