Enter the original price and the percentage increase into the calculator to determine the total price increase of an item.

Price Increase Formula

The following is the price increase formula:

NP = OP * (1+i/100)

  • Where NP is the new price ($)
  • OP is the original price ($)
  • i is the percentage increase (%)

Price Increase Definition

A price increase is defined as the change in the price of a good to a larger amount typically based on the percentage of the original price.

Why do prices increase?

Prices can increase for any number of reasons. The most common being a cost increase in raw materials, and increased demand, or a need for more profit.

Can price increase demand?

Demand can actually increase with an increase in price. The reason for this is that sometimes a consumer will think a product has a better quality if the price is higher than other products and may tend to purchase the more expensive item.

What happens when prices increase?

  1. When prices increase there will be a change in demand. Most often this will decrease demand, but in rare cases, demand can also increase.
  2. When price increase supply will have to change to meet the change in demand.
  3. When price increases total revenue may increase if demand stays the same. This is known as the price elasticity of demand.

What is a reasonable price increase percentage?

The only way to measure a reasonable price increase is to determine the price elasticity of demand and determine the optimal price for a good or service. From a consumer’s perspective the smaller the percentage increase the better. From a business perspective, the largest percentage increase that doesn’t decrease demand is ideal.

How to phrase a price increase?

Phrasing a price increase is a key component in having consumers understand why a price increase is happening, which can lead to consumers staying with the product or service regardless of the increase. You should phrase a price increase in a way that tells the consumer how this can benefit in the end, such as the price increase will go to improving quality, etc.

How to calculate a price increase?

  1. First, determine the original price.
  2. Next, determine the total percentage change from the original price to the increased price.
  3. Finally, calculate the price increase using the formula above.