Price Elasticity Demand Calculator

Background.

Raise a price by a fifth, lose a tenth of your sales, and you take in more money, not less: 1.2 × 0.9 = 1.08. Whether a price change pays off depends on how strongly buyers react, and price elasticity of demand puts a number on that reaction. It is the percentage change in quantity sold divided by the percentage change in price.

The awkward word is percentage. A drop from 100 units to 90 is a 10% fall, but a rise from 90 back to 100 is 11.1%; a price move from $10 to $12 is 20% up, the reverse only 16.7% down. Measured from one end, that pair of observations gives an elasticity of −0.5; measured from the other, −0.67. The midpoint method used here measures each change against the average of its two values instead, so the answer is the same whichever point you call old. For this pair it is −0.5789.

The sign is kept rather than dropped. Demand normally falls when price rises, so a negative result is the usual case, and its size carries the message. Below 1 in absolute value, demand is inelastic and revenue moves in the same direction as price. Above 1 it is elastic and revenue moves the other way. At exactly 1 revenue holds steady.

A positive result means price and quantity rose or fell together, which usually signals that something else changed between the two observations: a promotion, a season, a competitor's price, a mention in the press. Two data points cannot separate price from everything else that happened in between, so the figure describes that one stretch of the demand curve and is only as clean as the comparison behind it.

What is price elasticity demand calculator?

Price elasticity of demand is the ratio of the proportional change in the quantity buyers purchase to the proportional change in price that accompanied it. It has no units: a value of −0.5 means a 1% price rise cuts quantity by roughly half a percent, whatever the product or currency. The arc, or midpoint, version computed here measures both changes against the average of the old and new values, so it describes the average responsiveness along the stretch of the demand curve between two observed points.

How to use this calculator.

1. 01Enter the old price and the quantity sold at it, then the new price and the quantity sold after the change. Quantity can be units, kilograms or customers, as long as both figures use the same measure over periods of equal length.
2. 02Compare like with like: a normal week before the change against a normal week after it, not a December week against a January one, unless seasonality is what you mean to capture.
3. 03Leave the result's sign alone. A negative number is the normal case; a positive one suggests another factor moved sales at the same time as the price.
4. 04Read the size of the number: below 1 in absolute value, a price rise should lift revenue; above 1, it should reduce it.

The formula.

E = [(Q₂ − Q₁) ÷ ((Q₁ + Q₂) ÷ 2)] ÷ [(P₂ − P₁) ÷ ((P₁ + P₂) ÷ 2)]. Q₁ and P₁ are the quantity and price before the change, Q₂ and P₂ after it. The top line is the change in quantity as a share of the average quantity; the bottom line is the change in price as a share of the average price. Using averages rather than starting values makes the formula symmetric, so swapping old and new gives the same answer, and the two halvings cancel, which means E can also be written (Q₂ − Q₁)(P₁ + P₂) ÷ [(P₂ − P₁)(Q₁ + Q₂)]. The two prices must differ, since an unchanged price leaves nothing to divide by and the page refuses it. Because the result is a ratio of percentages, the currency and the unit of quantity drop out. The answer is most fragile when the price change is small: a modest price move set against a noisy sales figure can produce an extreme elasticity.

A worked example.

Frequently asked questions.

References& sources.

1. [1]OpenStax, Rice University. Principles of Finance, 2022. Chapters 6–10. Retrieved 2026-08-06.
2. [2]U.S. Internal Revenue Service. Tax guidance current 2026. Official forms, instructions and tax topics. Retrieved 2026-08-06.
3. [3]U.S. Securities and Exchange Commission. Investor.gov current 2026. Investment products and risk. Retrieved 2026-08-06.