Business Sales: If all prices increased by $0.50, how much would daily sales increase?

columbusgour

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Hi,

I wanted to know if a business has a daily sale of $5,000 and the business was to increase the price of everything in the store by $0.50 how much would the daily sale increase by? How would someone figure this out.

Thank you.
 
Not nearly enough information.

If you sell only one item for $5,000, then the increase is 50¢.
 
Hi,

I wanted to know if a business has a daily sale of $5,000 and the business was to increase the price of everything in the store by $0.50 how much would the daily sale increase by? How would someone figure this out.

Thank you.
How many things are making "everything"?

How many things are being sold to make $5000?
 
How much does it cost to build a house..., say...out of brick?

One needs ENOUGH information. Err on the side of excess. Providing nothing is never the right answer.
 
As a matter of mathematics, you need to say how many items are sold. As a matter of economics, you also need to say what you expect the reduction in number of sales from increasing prices will be.
 
So if the daily sale is $5000 and the average customer spends around $20, so that means give or take there are 250 transactions taking place every day. So if everything increases by $.50 then the sale should increase by at least $125 right? Or am I completely wrong?
Thank you.
 
Yes, 250*$0.50 = $125
But remember that if you raise your price you might get less customers as JeffM correctly pointed out.
 
So if the daily sale is $5000 and the average customer spends around $20, so that means give or take there are 250 transactions taking place every day. So if everything increases by $.50 then the sale should increase by at least $125 right? Or am I completely wrong?
Thank you.
What's included in one transaction? One item? Then yes, you are correct. If more than one, then what exactly is increased by $.50?
 
assuming one transaction usually involves a food and a drink. Everything from drinks to food to chips to sweets is increased by .50.
 
assuming one transaction usually involves a food and a drink. Everything from drinks to food to chips to sweets is increased by .50.
A lot of applied math is just writing down potentially relevant information in an orderly way.

[MATH]\text {# of transactions per day} = 250.[/MATH]
[MATH]\text {average # of items currently sold per transaction} = 2.[/MATH]
[MATH]\text {aggregate sales per day in dollars at current prices} = 5000.00.[/MATH]
Now you can start to calculate:

[MATH]\text {# of items currently sold per day} = 2 \times 250 = 500.[/MATH]
[MATH]\text {average current price per item in dollars} = \dfrac{5000.00}{500} = 10.00.[/MATH]
[MATH]\text {average price per item in dollars after increase of 50 cents} =[/MATH]
[MATH]10.00 + 0.50 = 10.50.[/MATH]
[MATH]\text {Aggregate sales per day in dollars at increased prices assuming no reduction in demand} =[/MATH]
[MATH]10.50 \times 500 = 5250.00.[/MATH]
[MATH]\text {Reduction in items sold that will offset price increase} = 500 - \dfrac{5000}{10.50} = 24 \text { approximately}.[/MATH]
That final calculation may not give you an exact answer, but it will be a close approximation.

[MATH]10.50 \times (500 - 24) = 10.50 \times 476 = 4998.00[/MATH]
 
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