The business question
A tea shop sells cutting chai at ₹15. The question is whether a price increase to ₹16, ₹17 or ₹18 creates more contribution after accounting for demand loss.
What I looked at
The analysis compares contribution per cup, estimated volume at each tested price, total contribution and the minimum volume needed to preserve the old economics.
Key number
At ₹16, contribution per cup increased to ₹8 and the minimum volume needed to preserve the previous contribution was 88 cups.
At ₹16, contribution per cup increased to ₹8 and the minimum volume needed to preserve the previous contribution was 88 cups.
Recommendation
Move to ₹16. It produced the strongest tested shop-level outcome while keeping the volume requirement realistic.
Why this matters
A business decision is rarely about maximizing one metric in isolation. The better answer balances unit economics, demand response, operational constraints and downside risk.
Spreadsheet
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