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BREAK-EVEN ELASTICITY

For average-margin SKUs, which is more likely to grow profit?

Break-evens differ by variable margin:

Decrease Price?

If drop price by 4%,

sales must increase more than 15% to grow profit.

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Break-even elasticity of -3.75 (i.e., 15/-4)

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B2B:  Highly unlikely

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B2C:  Possible, but rare

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Change in Price
Break-even change in sales

Increase Price?

If raise price by 4%, sales must decline less than 12% to grow profit.

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Break-even elasticity of -3.0 (i.e., -12/4)

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B2B:  Very likely

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B2C:  Likely 

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