Price Elasticity Calculator

Calculate your product's price elasticity of demand instantly using the midpoint formula to optimize your pricing strategy and maximize total revenue.

Initial Price (P₁) USD Original product or service price Please enter a valid price

New Price (P₂) USD New or proposed price Please enter a valid price

Initial Quantity (Q₁) units Units sold at the original price Please enter a valid quantity

New Quantity (Q₂) units Units sold at the new price Please enter a valid quantity

Calculation Results

Price Elasticity of Demand (E_d)

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Calculated using the standard midpoint method.

How to use this price elasticity calculator

Enter the initial price and quantity

Input the original price of your product and the number of units you historically sell at that price.

Enter the new price and quantity

Input the new price point you tested (or plan to test) and the resulting quantity of units sold.

Analyze the elasticity coefficient

The tool instantly calculates the elasticity score and classifies your demand as Elastic, Inelastic, or Unitary.

Review the revenue impact

Check the result breakdown to see exactly how this price change affected your total gross revenue.

Price Elasticity of Demand (Ed) Examples

Price Change (Old → New)	Demand Change (Old → New)	Elasticity (Ed)	Demand Type
$10 → $12	1000 → 950	0.28	Inelastic
$10 → $12	1000 → 800	1.22	Elastic
$10 → $12	1000 → 500	3.67	Elastic
$50 → $60	1000 → 950	0.28	Inelastic
$50 → $60	1000 → 800	1.22	Elastic
$50 → $60	1000 → 500	3.67	Elastic
$100 → $120	1000 → 950	0.28	Inelastic
$100 → $120	1000 → 800	1.22	Elastic
$100 → $120	1000 → 500	3.67	Elastic

Frequently asked questions

What is price elasticity of demand?

Price elasticity of demand (PED) is an economic measurement of how sensitive your customers are to changes in price. It tells you exactly how much your sales volume will drop if you raise your prices, or how much volume will increase if you lower them.

What does "Elastic" vs "Inelastic" mean?

If your absolute elasticity score is greater than 1, demand is Elastic — meaning consumers are highly price-sensitive (e.g., luxury goods). If the score is less than 1, demand is Inelastic — meaning consumers will buy the product regardless of a price increase (e.g., gasoline or essential medications).

Why use the midpoint formula?

The standard elasticity formula gives different results depending on whether the price is going up or down. The Midpoint Method (or Arc Elasticity) averages the starting and ending values, giving you the same elasticity coefficient regardless of the direction of the price change.

How does price elasticity affect total revenue?

If demand is Inelastic (score < 1), raising your price will increase total revenue, because the price jump offsets the minor loss in volume. If demand is Elastic (score > 1), raising your price will decrease total revenue, because the drop in volume is too severe.

About this calculator

This price elasticity calculator is designed for business owners, pricing strategists, and economists who need to measure customer price sensitivity. Understanding your product's elasticity allows you to find the exact price point that maximizes total gross revenue.

This tool utilizes the industry-standard Midpoint Formula (Arc Elasticity) to ensure consistent, non-directional results:

% Change in Quantity = (Q₂ - Q₁) ÷ ((Q₁ + Q₂) ÷ 2)
% Change in Price = (P₂ - P₁) ÷ ((P₁ + P₂) ÷ 2)

Price Elasticity (E_d) = % Change in Quantity ÷ % Change in Price

Note: Because price and quantity usually move in opposite directions, the raw elasticity coefficient is typically a negative number. However, economists universally refer to its absolute value (e.g., | -1.5 | = 1.5) when categorizing the demand as elastic or inelastic. Our calculator provides both the exact negative coefficient and its absolute interpretation.