A stationer buys notebooks at ₹40 each. He has been selling them at ₹60 and moving 300 a month. He now cuts the price to ₹55, and his sales rise to 400 a month. His monthly profit:

Profit is margin × volume. Before: (60 − 40) × 300 = ₹6000. After: (55 − 40) × 400 = ₹6000. The extra hundred notebooks exactly pay for the ₹5 given away on every one. (₹4000 is the rise in REVENUE, from ₹18000 to ₹22000, which is not the same thing at all. Charging the ₹5 cut against the old 300 notebooks gives a fall of ₹1500 and forgets the extra sales; crediting the extra 100 notebooks with the old ₹20 margin gives a rise of ₹2000 and forgets the cut.)