Price Elasticity Revenue Impact
10
How does changing price affect total revenue under various demand elasticity scenarios and external market shifts?
NOTEAbout This Model
## How does changing price affect total revenue under various demand elasticity scenarios and external market shifts? This model estimates **Total Revenue** based on uncertain inputs: Price Elasticity, Demand Curve Shift Factor, New Price. Run the simulation to see the distribution of possible outcomes.
VARIABLENew Price
triangular(5, 10, 15)
The proposed price level we want to test against the base price of $10.
new_price
VARIABLEPrice Elasticity
triangular(-2, -1.25, -0.5)
A value of -1 is unit elastic; -2 is highly elastic (sensitive), -0.5 is inelastic.
price_elasticity
VARIABLEDemand Curve Shift Factor
triangular(0.8, 1, 1.2)
Accounts for external market shifts (e.g., seasonality, competitors) that move the whole demand curve.
demand_curve_shift_factor
FORMULAProjected Quantity
base_quantity * pow(new_price / base_price, price_elasticity) * demand_curve_shift_factor
Projected quantity sold based on price change and elasticity, adjusted by a demand shift factor. Formula: Q2 = Q1 * (P2/P1)^e * Shift.
projected_quantity
FORMULATotal Revenue
new_price * projected_quantity
Total revenue at the new price point.
total_revenue
OUTPUTTotal Revenue
total_revenue
Total revenue at the new price point. Compares how volume drops from higher prices against the per-unit revenue gain. A wide distribution suggests the optimal price is highly sensitive to elasticity assumptions.
CONSTANTBase Quantity
1000
Baseline quantity sold at the reference price. Serves as the anchor for price-volume projections.
base_quantity
CONSTANTBase Price
10
Current or reference price used as the denominator in the price ratio calculation.
base_price
What is Carlo?
Carlo is a visual tool for Monte Carlo simulation. Model uncertainty by dragging probability distributions, connecting them visually, and running thousands of scenarios instantly.