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minus-squarepseudo@jlai.lulinkfedilinkarrow-up1·15 hours agoI see. Since the tarif is proportionate to the final price, the final price needs even higher than the initial price times (1 + tarif) in order to keep the profit the same.
minus-squareSludgeyy@lemmy.worldlinkfedilinkarrow-up2·12 hours agoStarting Price / (1-Tariff %) = Final Price Needed to Break Even $5 / (1-.25) = 5/.75 = $6.67 If an item was $5 and there was a 30% tariff 5 / (1-.30) = $7.14 If there was a 30% tariff and the syrup company wanted to keep same profit they would have to sell each bottle for $7.14. $7.14 × .30 = $2.14 $7.14 - $2.14 = $5
minus-squareSludgeyy@lemmy.worldlinkfedilinkarrow-up2·13 hours agoNo, because (1 + tariff) isn’t enough to keep up with the tariff because as the price goes up, the tariff also goes up. Like in the example going from $5 to $6.25 (5 × (1+.25)). Would result in 31 cents less per bottle. It needs to be ~33% more or $6.67 for the syrup company to keep the same profit with a 25% tariff. Final Price × Tariff % = Tariff Amount Final Price - Tariff Amount = Cost of Good Sold Cost of Good Sold - Expenses = Profit So if you need $2 profit $2 = (Final Price - (Final Price × Tariff %)) - Expenses $2 = (X - (X×.25)) - $3 $5 = X - .25X $5 = .75X X = $6.67 Formula would be Profit = (Final Price - (Final Price × Tariff %)) - Expenses
I see. Since the tarif is proportionate to the final price, the final price needs even higher than the initial price times (1 + tarif) in order to keep the profit the same.
Starting Price / (1-Tariff %) = Final Price Needed to Break Even
$5 / (1-.25) =
5/.75 = $6.67
If an item was $5 and there was a 30% tariff
5 / (1-.30) = $7.14
If there was a 30% tariff and the syrup company wanted to keep same profit they would have to sell each bottle for $7.14.
$7.14 × .30 = $2.14
$7.14 - $2.14 = $5
No, because (1 + tariff) isn’t enough to keep up with the tariff because as the price goes up, the tariff also goes up.
Like in the example going from $5 to $6.25 (5 × (1+.25)). Would result in 31 cents less per bottle.
It needs to be ~33% more or $6.67 for the syrup company to keep the same profit with a 25% tariff.
Final Price × Tariff % = Tariff Amount
Final Price - Tariff Amount = Cost of Good Sold
Cost of Good Sold - Expenses = Profit
So if you need $2 profit
$2 = (Final Price - (Final Price × Tariff %)) - Expenses
$2 = (X - (X×.25)) - $3
$5 = X - .25X
$5 = .75X
X = $6.67
Formula would be
Profit = (Final Price - (Final Price × Tariff %)) - Expenses
Thanks !
No problem!