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[–] 2 points 2 years ago (2 children)

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

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