Optimal Price Calculator

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Linear mode takes the demand intercept and slope directly. Elasticity mode estimates demand from two price-quantity pairs.
The price at which demand falls to zero (vertical intercept of the inverse demand curve P = a - b*Q).
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How much the price falls for each additional unit sold. A slope of 0.5 means price drops $0.50 per unit.
The additional cost of producing one more unit.
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Total fixed costs (rent, salaries, etc.). These do not affect the optimal price or quantity, but they reduce profit.
currency
Currency
Optimal priceSignificant market power
$60.00

The profit-maximizing selling price

Optimal quantity80units
Maximum profit$3,200.00
Price elasticity of demand-1.5
Lerner Index0.667
Markup over MC2%
Consumer surplus$1,600.00
Producer surplus$3,200.00
Deadweight loss$1,600.00
Competitive price (MC)$20.00
Competitive quantity160units
0.667
Near-competitive<0.1Moderate power0.1-0.4Significant power0.4-0.7High power0.7+
Profit$3,200.00
Consumer Surplus$1,600.00
Deadweight Loss$1,600.00

Optimal price is 60.00 for 80 units, yielding a profit of 3200.00.

  • At the optimal price of 60.00, the markup over marginal cost is 40.00 per unit.
  • The price elasticity of demand at the optimal point is -1.50 (elastic). Profit-maximizing firms always price in the elastic region.
  • The Lerner Index is 0.667, indicating that 66.7% of the price reflects market power rather than cost.
  • This pricing strategy creates a deadweight loss of 1600.00, representing welfare that neither buyers nor sellers capture.

Next stepCompare the optimal price against your current price. If your current price is above the optimal, you may be leaving sales on the table; if it is below, you are sacrificing margin.

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