Free calculator · Venture & Startup Finance
Pricing Sensitivity, Price Change → Operating Profit
Calculates how a price change, net of any volume response, flows through to operating profit, holding variable cost per customer constant. Inputs are the price, variable cost per customer, fixed costs, customer count, and the percentage changes in price and volume.
Interactive Tool
Pricing Sensitivity, Price Change → Operating Profit
Base operating profit
$0
$20/customer contribution (40% margin)
New operating profit
$35,000
$30/customer contribution
Change in operating profit
+$35,000
new price $60 × 4,500 customers
Break-even volume swing on this price change
-33%
the volume change that would leave total contribution unchanged (with a price rise, how much volume you could afford to lose)
Because variable cost per customer does not rise with price, a price increase is almost pure contribution: it flows disproportionately to profit while fixed costs do not move. That is why a modest price rise can beat a large volume gain, and why discounting destroys models faster than founders expect.
Learn the concept
This calculator comes from the free Entrepreneurial Finance course, where the concept is taught with readings, worked examples, and practice questions.
Built by Devon Coombs, CPA, MBA, Teaching Professor of Finance at Santa Clara University.