doc__table__256
| (175) | This trade-off is illustrated in Box 16 below. If a firm, for instance a direct customer of a producer of raw materials, increases prices, the effect on profit from higher prices may be illustrated by the area A in the left section of Box 16. The corresponding lost profit stemming from decreased sales is equal to the area B. When the effect of another small increase in the price is such that area A is equal to area B, there is no scope to earn additional profit through further price adjustments. If prices are increased beyond this point, the profit margin lost through the resulting reduction in sales volumes will outweigh the increased margins earned on the remaining sales.
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Source: EUR-Lex (Cellar) · retrieved 2026-09-25 · Text as adopted (Official Journal); later amendments are not incorporated in this text.