Price Elasticity Calculator
Compute price elasticity of demand from two prices and two quantities. Choose midpoint (arc) elasticity or simple percent change from the initial values. Informational, not pricing advice.
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How to calculate price elasticity of demand
- Enter the starting price and quantity, then the new price and quantity.
- Choose midpoint elasticity for textbook arc elasticity, or simple percent change from the initial point.
- Read E, |E|, the elastic/inelastic/unit label, and the percent changes used.
- Demand elasticities are usually negative when price rises and quantity falls. Classification uses the absolute value.
Price elasticity of demand
Responsiveness of quantity demanded to price
| E | % change in quantity divided by % change in price |
|---|---|
| Midpoint method | Percent changes use average of start and end values |
| Simple method | Percent changes use the initial price and quantity as bases |
| Elastic | |E| greater than 1 |
| Inelastic | |E| less than 1 |
| Unit elastic | |E| equal to 1 |
What price elasticity measures
Price elasticity of demand shows how strongly quantity responds when price changes. If price rises from 10 to 12 and quantity falls from 100 to 90, midpoint elasticity is about −0.58 (inelastic).
Price, quantity, and percent change
Price is the unit price you set. Quantity is units sold or demanded. Percent changes can use the initial base or the midpoint average. Dividing those percents yields E.
How midpoint and simple methods differ
Midpoint divides each change by the average of the two points so raising or cutting price along the same segment gives a matching |E|. Simple method always divides by the initial values, so direction can change the magnitude.
Limits
Two-point arithmetic only. Not a demand forecast, not pricing advice, not antitrust analysis. See the disclaimer.