Price Elasticity of Demand Calculator

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Midpoint is the most common textbook method and avoids the end-point bias of the simple percentage method. Use Percentage if you already know the % changes. Use Point elasticity to evaluate at a specific price on a known linear demand curve.
The original price before the change.
$
The price after the change.
$
Quantity demanded at the initial price.
units
Quantity demanded after the price change.
units
Price Elasticity of Demand (PED)Elastic
-1.222

Negative values are normal: demand and price move in opposite directions.

PED magnitude (|PED|)1.222
Elasticity typeElastic
Revenue effectPrice increase reduces total revenue; price cut raises it.
Revenue before5,000$
Revenue after4,800$
Revenue change-200$
% change in quantity-22.22%
% change in price18.18%
1.222 |PED|
Perfectly inelastic<0.001Inelastic0.001-1Unitary elastic1-1.001Elastic1.001+

PED = -1.222 (Elastic)

  • Demand is elastic: buyers are sensitive to this price change. A price increase will reduce total revenue; a price cut will raise it.
  • Elastic demand is common for luxury goods, items with many close substitutes, or goods that take a large share of consumer income.
  • Total revenue decreased by $200.00 as a result of this price change.

Next stepWith elastic demand, focus on the value proposition or differentiation before raising prices, since buyers will readily shift to substitutes.

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