A price increase calculator answers a narrower question than “will customers mind.” It asks what contribution is left after the new price and the unit change you expect.
The SBA’s break-even guide defines contribution margin as price minus the cost to make the product. The glossary of business financial terms treats break-even as the sales volume that covers costs, using variable cost and profit. The price increase calculator keeps that leftover and moves two inputs: the list price, and the percent change in units.
New price = price × (1 + increase)
New units = units × (1 + volume change)
Contribution change = (new price - variable cost) × new units - (price - variable cost) × units
The page also prints the volume change that holds contribution where it started. That line is old contribution per unit ÷ new contribution per unit - 1.
A cut is the mirror question. The discount break-even calculator asks how many extra units hold total contribution after you lower the price. The ratio on one unit, and the units that cover fixed costs, sit on the contribution margin calculator. The contribution margin post walks that ratio. A target margin used to set the list price is the markup vs margin calculator.
Variable cost per unit stays put. Extra ads, a mix shift, and unused capacity stay out. These examples use the formula. They are not a pricing plan.
Fig 1
Price, units, leftover
Contribution uses the new price and the new unit count
Raise the price, apply the volume change you typed, then compare contribution with the old leftover. The hold line is the volume drop that keeps that leftover flat.
Example 1. Ten percent up, eight percent fewer units
This is the calculator’s published example.
- Current price: $80
- Current units: 1,000
- Variable cost: $48
- Price increase: 10%
- Expected volume change: -8%
Old contribution per unit = 80 - 48 = $32.
Old contribution = 32 × 1,000 = $32,000.00.
New price = 80 × 1.10 = $88.00.
New contribution per unit = 88 - 48 = $40.
New units = 1,000 × 0.92 = 920 units.
New contribution = 40 × 920 = $36,800.00.
Contribution change = 36,800 - 32,000 = $4,800.00.
Old revenue = 80 × 1,000 = $80,000. New revenue = 88 × 920 = $80,960. Revenue change = $960.00.
Volume change that holds contribution = 32 ÷ 40 - 1 = -20%.
An 8% drop is well short of that 20% line, so leftover rises. Revenue rises too, by much less than contribution, because you also stopped spending $48 on each of the 80 units you no longer sell.
Calculator result
Price increase impact
- Current selling price
- $80.00
- Current unit sales
- 1000 units
- Variable cost per unit
- $48.00
- Price increase
- 10%
- Expected volume change
- -8%
$4,800.00
extra contribution after the change
- Revenue change
- $960.00
- New contribution
- $36,800.00
- New price
- $88.00
Fig 2 · 1/2
One $80 unit
Variable cost $48, before any price change
Variable cost
$48
Contribution
$32
Variable cost is $48, which is 60% of the $80 price.
Contribution is $32, a 40% ratio on this unit.
Example 2. What if nobody leaves?
Keep the $80 price, the $48 cost, the 1,000 units, and the 10% rise. Set the volume change to 0%.
New units stay 1,000. New contribution = 40 × 1,000 = $40,000.00.
Contribution change = 40,000 - 32,000 = $8,000.00.
Revenue change is the same $8,000.00, because every old unit is still sold and each one brings in $8 more. The hold line is still -20%. You did not use any of that room.
Example 3. What if volume rises 5%?
Same price book. Volume change +5%.
New units = 1,000 × 1.05 = 1,050 units.
New contribution = 40 × 1,050 = $42,000.00.
Contribution change = $10,000.00.
New revenue = 88 × 1,050 = $92,400. Revenue change = 92,400 - 80,000 = $12,400.00.
Here revenue moves more than contribution. The extra 50 units each carry $48 of variable cost, so 50 × 48 = $2,400 of the extra revenue never reaches contribution. 12,400 - 10,000 = $2,400.
Example 4. The drop that holds contribution flat
Volume change -20%, which is the hold line from example 1.
New units = 1,000 × 0.80 = 800 units.
New contribution = 40 × 800 = $32,000.00.
Contribution change = $0.00.
New revenue = 88 × 800 = $70,400. Revenue change = 70,400 - 80,000 = -$9,600.00.
Contribution is flat and revenue is down $9,600. That gap is the variable cost you no longer incur on the 200 unsold units: 200 × 48 = $9,600. If you only watch the sales line, this price rise looks like a loss. On contribution it is a wash.
Example 5. Past the hold line
Volume change -30%.
New units = 700. New contribution = 40 × 700 = $28,000.00.
Contribution change = 28,000 - 32,000 = -$4,000.00.
Revenue change = 88 × 700 - 80,000 = -$18,400.00.
The sales line falls $18,400. Contribution falls $4,000. Both are worse. The contribution hit is the one that has to cover fixed costs later.
Fig 3 · 1/7
Contribution after a 10% rise
Price $88, variable cost $48, starting from 1,000 units
New contribution
- Contribution
| Point | Contribution |
|---|---|
| 0% | $40k |
| -5% | $38k |
| -10% | $36k |
| -15% | $34k |
| -20% | $32k |
| -25% | $30k |
| -30% | $28k |
With no volume loss, contribution is $40,000.
At a 20% drop it is back to $32,000. At 30% it is $28,000.
The old contribution was $32,000. The area crosses that level at -20%. A few points on the way down are worth reading on their own, because revenue and contribution part company.
- Volume -5%: contribution change $6,000.00, revenue change $3,600.00, 950 units.
- Volume -10%: contribution change $4,000.00, revenue change -$800.00, 900 units.
- Volume -15%: contribution change $2,000.00, revenue change -$5,200.00, 850 units.
At -10%, leftover is up $4,000 and sales are down $800.
The exact flat point for revenue is 80,000 ÷ 88 = 909.09 units, a 9.09% drop. Type -9.09% and the calculator prints a revenue change of $0.80 and a contribution change of $4,364.00, on 909.1 units. The $0.80 is rounding on a percent typed to two decimals. Contribution is still ahead by thousands.
Example 6. The same rise on a fatter unit
Change only variable cost, from $48 to $16. Price $80, 1,000 units, 10% rise, volume -8%.
Old contribution per unit = 80 - 16 = $64. Old total = $64,000.00.
New contribution per unit = 88 - 16 = $72.
New total = 72 × 920 = $66,240.00.
Contribution change = $2,240.00.
Revenue change is still $960.00. Revenue does not know your cost. Contribution does.
Hold line = 64 ÷ 72 - 1 = -11.1%.
On the $48 unit you could lose 20% of volume and stay flat. On this unit you can lose 11.1%. The 8% reaction is still inside that room, so you gain $2,240, against $4,800 in example 1. A fatter unit gives the price rise less room, because $8 is a smaller share of a $64 leftover than of a $32 leftover.
Example 7. A thin $20 price
- Price: $20
- Units: 2,000
- Variable cost: $16
- Increase: 10%
- Volume change: -8%
Old contribution per unit = $4. Old total = 4 × 2,000 = $8,000.00.
New price = $22.00. New contribution per unit = $6.
New units = 1,840. New total = 6 × 1,840 = $11,040.00.
Contribution change = $3,040.00.
Revenue change = 22 × 1,840 - 40,000 = $480.00.
Hold line = 4 ÷ 6 - 1 = -33.3%.
The $2 price increase is half of the old $4 leftover, so you can lose a third of the units before contribution is flat. Revenue barely moves. Most of the $3,040 gain is cost you do not spend on the 160 units that go away, plus the extra $2 on the units that stay.
Example 8. A small rise that still loses leftover
- Price: $45
- Units: 800
- Variable cost: $27
- Increase: 5%
- Volume change: -12%
Old contribution per unit = 45 - 27 = $18. Old total = 18 × 800 = $14,400.
New price = 45 × 1.05 = $47.25. New contribution per unit = 47.25 - 27 = $20.25.
New units = 800 × 0.88 = 704.
New contribution = 20.25 × 704 = $14,256.00.
Contribution change = 14,256 - 14,400 = -$144.00.
Revenue change = -$2,736.00.
Hold line = 18 ÷ 20.25 - 1 = -11.1%.
The volume reaction is -12%, just past -11.1%, so leftover falls by $144. The sales line falls by $2,736. If you had stopped the reaction at -11%, contribution would have been flat. One point of volume past the hold line is enough to flip the sign.
Fig 4 · 1/2
Where the new revenue goes
A 10% rise on the $80 unit with a $48 cost
- Variable cost
- Contribution
| Category | Variable cost | Contribution |
|---|---|---|
| No loss | $48k | $40k |
| 8% fewer | $44k | $37k |
| 20% fewer | $38k | $32k |
Variable cost is $48,000, $44,160, and $38,400.
Contribution is $40,000, $36,800, and $32,000.
The no-loss stack is the tallest, at $88,000 of revenue. The 20% stack is shorter, at $70,400, and its contribution slice matches the old $32,000.
Example 9. A price cut, and the extra units it needs
Put a -10% change into the price calculator. Same $80, 1,000 units, $48 cost, volume change 0%.
New price = 80 × 0.90 = $72.00.
New contribution = (72 - 48) × 1,000 = $24,000.00.
Contribution change = -$8,000.00. Revenue change = -$8,000.00.
The hold line flips sign. It prints 33.3%, the volume gain that would put contribution back.
That 33.3% is the discount calculator’s question. On 1,000 units, a 10% discount, price $80, variable cost $48:
New contribution per unit = $24.00.
Extra volume = 32 ÷ 24 - 1 = 33.3%.
Extra units = 0.333… × 1,000 = 333.3 units.
Units after the discount = 1,333.3 units.
A common shortcut says a 10% price cut needs about 10% more units. Ten percent of 1,000 is 100 units. That leaves you at 1,100 units and contribution of 24 × 1,100 = $26,400, which is $5,600 under the old $32,000. The formula wants 333.3 extra units, not 100.
The same 10% cut on the published 500-unit example needs 166.7 extra units, 666.7 in total. The percent does not change with the starting count. The unit count does.
Change only the discount, still on 1,000 units at $80 with a $48 cost:
- 5% off, new price $76.00, new contribution $28.00. Extra volume 14.3%. Extra units 142.9. Total units 1,142.9.
- 20% off, new price $64.00, new contribution $16.00. Extra volume 100%. Extra units 1,000. Total units 2,000.
A 5% discount needs a 14.3% unit lift, not a 5% lift. A 20% discount needs you to double unit sales. Old contribution was $32. New contribution is $16. Twice the units, same leftover.
Fig 5 · 1/3
Extra units to hold $32,000
1,000 units at $80, variable cost $48
Extra units
5% off
142.9 units
10% off
333.3 units
20% off
1,000 units
A 5% discount needs 142.9 extra units.
A 10% discount needs 333.3. A 20% discount needs 1,000.
Calculator result
Discount break-even
- Selling price per unit
- $80.00
- Variable cost per unit
- $48.00
- Discount off the list price
- 10%
- Current unit sales
- 500 units
33.3%
extra volume to hold contribution
- Extra units
- 166.7 units
- Units after the discount
- 666.7 units
- New contribution / unit
- $24.00
Example 10. The cut that removes contribution
Price $80, variable cost $48, discount 50%, current units 500.
Discounted price = 80 × 0.50 = $40.00.
New contribution per unit = 40 - 48 = -$8.
The calculator stops: Discount wipes out contribution. Selling more units at $8 under cost makes the hole larger. There is no extra-volume percent that puts the old leftover back.
A thin unit can demand a huge lift before it breaks. Price $80, variable cost $70, discount 10%, 500 units. New price $72.00, new contribution $2.00. Extra volume 400%. Extra units 2,000. Total units 2,500. You would need five times the old unit count to hold contribution, because $8 of the old $10 leftover was given away.
Contribution on the new $88 price
The price page reports the change in dollars. The contribution page reports the ratio.
On the new price from example 1, with 920 units and $20,000 of fixed costs in the period:
- Contribution per unit = $40.00
- Ratio = 40 ÷ 88 = 45.5%
- Total contribution = $36,800.00
- After fixed costs = 36,800 - 20,000 = $16,800.00
- Units to cover fixed costs = 20,000 ÷ 40 = 500
The old $80 price, 1,000 units, same $20,000 fixed costs:
- Ratio 40%, per unit $32.00, total $32,000.00
- After fixed costs $12,000.00
- Units to cover fixed costs = 20,000 ÷ 32 = 625
The rise moved the ratio from 40% to 45.5%, and it cut the fixed-cost unit count from 625 to 500. After fixed costs, the 920-unit case leaves $16,800 against $12,000 on the old 1,000 units.
Calculator result
Contribution margin
- Selling price per unit
- $88.00
- Variable cost per unit
- $48.00
- Units sold in the period
- 920 units
- Fixed costs in the period
- $20,000.00
45.5%
contribution-margin ratio
- Contribution per unit
- $40.00
- Total contribution
- $36,800.00
- After fixed costs
- $16,800.00
Fixed costs do not enter the ratio. They enter the leftover after you multiply by units. Operating profit, which also takes overhead off a whole period, is the operating margin post.
The price cases side by side
Each row uses the price increase calculator unless the note says otherwise. Contribution change is the headline.
| Case | Price move | Volume | New contribution | Contribution change | Revenue change | Hold line |
|---|---|---|---|---|---|---|
| 1. Published | $80 to $88 | -8% | $36,800.00 | $4,800.00 | $960.00 | -20% |
| 2. No loss | $80 to $88 | 0% | $40,000.00 | $8,000.00 | $8,000.00 | -20% |
| 3. Volume up | $80 to $88 | +5% | $42,000.00 | $10,000.00 | $12,400.00 | -20% |
| 4. Hold flat | $80 to $88 | -20% | $32,000.00 | $0.00 | -$9,600.00 | -20% |
| 5. Past the line | $80 to $88 | -30% | $28,000.00 | -$4,000.00 | -$18,400.00 | -20% |
| 6. Fatter unit | cost $16 | -8% | $66,240.00 | $2,240.00 | $960.00 | -11.1% |
| 7. Thin $20 unit | $20 to $22 | -8% | $11,040.00 | $3,040.00 | $480.00 | -33.3% |
| 8. 5% rise | $45 to $47.25 | -12% | $14,256.00 | -$144.00 | -$2,736.00 | -11.1% |
| 9. 10% cut, no lift | $80 to $72 | 0% | $24,000.00 | -$8,000.00 | -$8,000.00 | +33.3% |
| 10. 50% cut | $80 to $40 | n/a | wiped out | n/a | n/a | none |
Read the hold line before you read the revenue change. Example 4 keeps contribution and loses $9,600 of revenue. Example 5 loses both. Example 7 gains $3,040 of contribution on a $480 revenue move, because the unit was thin.
If the new price has to cover a rent bill as well as variable cost, take the contribution per unit from this page and divide it into those fixed costs on the contribution margin calculator. The price page will not do that division for you.