Business · 33 calculators
Price Elasticity Of Demand Calculator
Elasticity measures how much buyers change their behaviour when the price moves. It is the number that tells you whether a price rise earns more money or less.
Price elasticity of demand
-1.2
- Change in price
- 10.00%
- Change in quantity
- -12.00%
- Change in revenue
- -3.20%
- Arc elasticity
- -1.3404
Values update as you type. This calculator covers the single scenario its formula assumes — see Common Mistakes for what it leaves out.
The formula this calculator uses
E = (% change in quantity) / (% change in price)
- E
- Elasticity, usually negative because quantity falls as price rises
- %Q
- The percentage change in quantity demanded
- %P
- The percentage change in price
How to check the result by hand
- 1
Work out the percentage change in price
Subtract and divide by the starting price. Going from 20 to 22 is 2 over 20, which is 10 percent.
- 2
Work out the percentage change in quantity
Falling from 1,000 to 880 units is 120 over 1,000, which is 12 percent and is negative in direction.
- 3
Divide quantity by price
Minus 12 percent over 10 percent gives minus 1.2. The minus sign is expected; the magnitude above one is the finding.
- 4
Confirm it with revenue
Revenue was 20,000 and is now 19,360, a fall of 3.2 percent. That confirms the price rise lost money at these volumes.
- 5
Recompute with the arc method for larger moves
Measuring both changes against the midpoints gives minus 1.3404. If the two methods disagree materially, trust the arc figure for a large price step.
For worked examples, common mistakes and the limits of this formula, read the full How To Calculate Price Elasticity Of Demand page.