Consulting Consulting
Finance General
Finance General
Schedule mock interviews on the Meeting Board, join the latest community discussions in our Consulting Q&A and find like-minded Interview Partners to connect and practice with!
Meeting Board
Consulting Q&A
Interview Partner
Premium Membership
Back to overview
Ameya
on Feb 11, 2020
Global
Question about
Case
I want to receive updates regarding this question via email.

Can someone explain this calculation?

How much market share can the client lose before reducing the price by 20% becomes an option?

1
2.9k
16
Write an answer
Be the first to answer!
Nobody has responded to this question yet.
Top answer
Ian
Coach
on Feb 11, 2020
Top US BCG / MBB Coach - 5,000 sessions |Tech, Platinion, Big 4 | 9/9 personal interviews passed | 95% candidate success

Hi Ameya,

So what they're basically saying is, what is the reduced profit from cutting price by 20%?

Then, what is the equivalent amount of change in units sold that would get you the same reduction in profit (essentially saying you would reduce price to keep selling the same amount of units).

You're basically palying aroudn with different variables in a breakeven equation:

Break even quantity = Fixed costs / (Sales price per unit – Variable cost per unit)

7
Contact coach
2 comments
Anonymous A
on Mar 20, 2022
break even quantity= FC/(sp-VC)= 300,000/(10-4)= 50,000 units. How come it is 66.6666 units?
Tushar
on Dec 05, 2022
I think the answer should be we can reduce the units by 66,666 number as when we reach 33,333 units our profit/unit which is 10$ in Rev- 4$ in VC -3% in FC = 3$ multiplied by 33,333 =~100K in profit is equal to what we can achieve if we reduce the price i.e. 8$ in price -4$ in VC-3$ in FC =1$ profit/unit *100K units=100K in profit

So we can reduce our volume by 66% and not 33%
Similar Questions
Consulting
Just did the Mckinsey Solve Game (January 2025) - got some questions/insights
on Apr 24, 2025
Global
5
4.3k
Top answer by
Hagen
Coach
#1 recommended coach | >95% success rate | 8+ years consulting, 8+ years coaching and 7+ years interviewing experience
43
5 Answers
4.3k Views
+2
Consulting
Guidance for prep for McKinsey interview in 1 week
on May 15, 2025
Europe
9
3.4k
Top answer by
Hagen
Coach
#1 recommended coach | >95% success rate | 8+ years consulting, 8+ years coaching and 7+ years interviewing experience
77
9 Answers
3.4k Views
+6
Consulting
Strategy& salaries starting in the middle east
on May 21, 2024
Global
8
2.5k
Top answer by
Fady
Hi,   Based on my knowledge from friends working there, the starting salary range for an associate is around $70-80k... (read entire answer)
Hi,   Based on my knowledge from friends working there, the starting salary range for an associate is around $70-80k as base salary, On top of which you get a housing allowance... (read entire answer)
40
8 Answers
2.5k Views
+5
Question on the Case
Case by
PrepLounge
Wall Inc.
4.3
18.0k times solved
Beginner
Interviewer-led
Open case
Related Product
Prepped and Primed 3
5.0
31 reviews
USD 1,478
USD 1,185
More information
Similar Questions
Consulting
Just did the Mckinsey Solve Game (January 2025) - got some questions/insights
on Apr 24, 2025
43
5
4.3k
Consulting
Guidance for prep for McKinsey interview in 1 week
on May 15, 2025
77
9
3.4k
Consulting
Strategy& salaries starting in the middle east
on May 21, 2024
40
8
2.5k
How likely are you to recommend us to a friend or fellow student?
0
1
2
3
4
5
6
7
8
9
10
0 = Not likely
10 = Very likely
Submit feedback
Thanks for your feedback! Your opinion helps us make PrepLounge even better.
Close Close and keep on prepping
Want to leave already?
After your registration you have free access to:
12 mock interviews with peers
360.000+ peers in our community
36 exercises (incl. structuring drills, mental math, brainteasers and more)
Video tutorials
Video case solutions
Sign up for free
Questions or Feedback?
Select category
  • Select category
  • Case Interview Preparation
  • Coaching
  • Technical Problems
  • Other
Your name
Your email address
Cancel