Percentage Changes

 The Problem:

 Weightrows, the supermarket giant, are trying to increase sales of their brand of sliced bread.

They don’t need to make any extra money overall on this line, as it has been proved that just getting more people into the store, buying bread, increases sales of other goods too.

This is the idea of the ‘loss-leader’ line of goods that every supermarket targets advertising at. 

They hope to increase sales by dropping the price by 5%, and would like to keep their total earnings about the same.


What percentage increase in sales will they need to see, in order to achieve this ‘break even’?


Why won’t a 5% increase in sales compensate for the 5% decrease in price ?


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Last modified: June 18, 2007