I'm actually wondering what the correct name for the difference between the minimum selling price and the actual selling price is?

Let's say I'm having an product A. After all calculations(costs, planned profit, possible discounts,...) I can sell my product for 7€(my minimum selling price). On the market I can offer it for 10€. In this case im making an extra margin of 3€.

That means: extra Margin(3€) = actual Selling price(10€) - minimum selling price(7€)

Now I'm wondering what the correct name of this extra margin(3€) is?

I already thought it could be the contribution margin, but isn't this something different?


Sale price minus cost is profit per unit or marginal producer surplus. It's not quite clear what this "planned profit" means. If you're including opportunity costs in this amount (I could spend my time working another job making X, so if I instead spend my time making Product A, I want to make at least X doing so), those are part of the costs. If you literally mean "How much I think I'll profit from this", that has no economic meaning.

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  • $\begingroup$ @Accumulation thanks for your answer. I already calculated a profit of 10% into my minimum selling price of 7€. That means even if I would sell my product for those 7€ I still would make profit. And now I'm wondering what the correct name for this extra 3€, I'm making, is? $\endgroup$ – Felix Gerber Aug 3 '18 at 9:01

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