Price Acceptance Curve
Visualize the percentage of your market willing to pay at specific price points. Identify the 'Mass Market' zone vs the 'Premium' zone to optimize revenue.
Market Data
At 60% acceptance
Acceptance vs Revenue
Finding the Peak
Where do the lines cross?
The Revenue Peak
The Green Line (Revenue Index) peak at $40 is your mathematical sweet spot for maximizing top-line sales.
The Volume Trade-off
At the revenue peak, notice how much lower the Acceptance % (Purple Area) is compared to the cheap prices. You are sacrificing volume for value.
The Shoulder
Look for where the purple curve starts to drop steeply. Pricing just before this drop captures the most volume before sensitivity kicks in.
Execution Steps
Input survey data (Price points and Cumulative % willing to buy).
The chart plots the 'Acceptance Rate' (Purple Area) and 'Revenue Index' (Green Line).
The Revenue Index helps you balance Volume (Acceptance) vs Value (Price).
Look for the 'Shoulder' of the curve - the price before the steepest drop.
Pro Strategy
- If you want mass adoption (e.g. social network, platform play), stay in the >60% acceptance zone to ensure virality.
- If you want premium positioning, target the 10-20% zone, provided the revenue index justifies it. Niche is profitable.
- The steepest part of the slope indicates the highest price sensitivity. Avoid pricing changes in that zone.
Core Concepts
Market Penetration
The % of total addressable market captured at a specific price. Low price = High penetration (e.g. 90% at $10).
Revenue Optimization
Sometimes a lower acceptance rate yields higher total revenue if the price is high enough. This trade-off is the Revenue Index.
Cumulative Demand
The curve assumes anyone willing to pay $50 is also willing to pay $40. It is cumulative downwards.
What is Price Acceptance Curve?
The Acceptance Curve plots cumulative demand against price. By overlaying a 'Revenue Index' (Price * Acceptance %), we can visually identify the price point that maximizes total revenue, balancing the trade-off between margin and volume.
Best For
- • Finding the revenue-maximizing price point.
- • Deciding between a volume strategy (low price) vs margin strategy (high price).
- • Visualizing survey data for stakeholders.
Limitations
- • Assumes 'all else equal' (no competitor reaction).
- • Revenue Index assumes zero marginal cost. Use the Margin Calculator for physical goods.
- • Data quality depends on the accuracy of the underlying survey.
Alternative Methods
Elasticity Simulator
Calculates the coefficient mathematically.
Gabor-Granger
The survey method often used to generate this data.
Industry Applications
See how this methodology generates real revenue uplift in different sectors.
Video Game Launch
Publisher debated $60 vs $70 price point.
Acceptance curve showed 80% would pay $60, but 75% would still pay $70.
SaaS Tool
Maximize user base or revenue?
Curve showed mass acceptance at $10/mo, but a revenue peak at $50/mo (niche use).
Conference Tickets
Pricing early bird vs regular tickets.
Plotted historical acceptance. Found 40% acceptance at $299 vs 10% at $599.