From the course: Data Analytics for Pricing Analysts in Excel

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Estimating profit-maximizing price with Goal Seek

Estimating profit-maximizing price with Goal Seek - Microsoft Excel Tutorial

From the course: Data Analytics for Pricing Analysts in Excel

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Estimating profit-maximizing price with Goal Seek

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- [Instructor] I'm in the 02_03_Begin Excel file. Now that we've learned how to set up our demand curves, our next step is to actually go through and figure out what the best price is, given those level of demand curves. We need a bit more data here, so I've added some for us. We have, as before, the prices that we would charge for each of two different products and the level of unit sales that we expect. But now, we also need to have a sense for what the costs are on these products. So I've set up a cost of $51 for product number one and a cost of $24 for product number two. And what we want to do is figure out what our best price is. To do this, we need to understand the relationship between sales and demand, but we need to take into account cost. That leads us to our profit equation. So our profit is simply equal to the number of units that we sell multiplied by the price less our cost per good. We go through and use…

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