Price elasticity of demand calculator
Elasticity measures how much quantity demanded moves when price changes. Enter price and quantity before and after the change.
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How to use it
- Enter initial price, new price, quantity at initial price and quantity at new price.
- The result appears straight away and updates as you edit.
- Copy the result, or copy a link that keeps the same values to share it.
How it is calculated
%ΔQ = (Q2 - Q1) ÷ ((Q1 + Q2) ÷ 2). %ΔP = (P2 - P1) ÷ ((P1 + P2) ÷ 2). Elasticity = %ΔQ ÷ %ΔP.
Example
Inputs: Initial price = 10, New price = 12, Quantity at initial price = 100, Quantity at new price = 80. Result: Elasticity: -1.222; Demand type: Elastic; Change in quantity: -22.22%.
Limits and caveats
- Assumes price alone moved the quantity, while seasons, rivals and ads also play a part.
- Elasticity changes along the demand curve, so the result holds for this price range only.
Questions about this tool
Why is elasticity usually negative?
Quantity normally falls when price rises. Classification uses the absolute value.
Why use the midpoint method?
It gives the same answer whether price goes up or down between the two points, because it divides by the average.
What does inelastic demand mean for a seller?
A price rise cuts quantity by a smaller percentage than the rise, so revenue goes up.