Price Optimizer: Revenue vs. Profit
Analyze the trade-offs between maximizing Top-Line Revenue and maximizing Bottom-Line Profit.
Model Assumption: We assume a linear and negative relationship between Demand (Q) and Price (P).
Formula: Q = A + B × P (where B is negative).
This implies that as price increases, demand decreases at a constant rate.
Formula: Q = A + B × P (where B is negative).
This implies that as price increases, demand decreases at a constant rate.
Strategy 1: Maximize Revenue
Optimal Price
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Quantity Sold
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Resulting Revenue
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Profit Generated: --
Strategy 2: Maximize Profit
Optimal Price
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Quantity Sold
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Resulting Profit
--
Revenue Generated: --
Rev Max
Profit Max
Profit Gap