Price Elasticity Calculator
Calculate how price changes affect demand
About this calculator
The Price Elasticity Calculator measures how sensitive customer demand is to price changes by calculating the price elasticity of demand coefficient. This powerful tool helps businesses understand whether their products are elastic (highly sensitive to price changes) or inelastic (relatively insensitive to price changes). By analyzing this relationship, companies can make informed pricing decisions, optimize revenue strategies, and predict how price adjustments will impact sales volume and overall profitability.
How to use
Enter your original price and quantity sold, then input the new price and corresponding quantity sold after the price change. The calculator will compute the percentage change in both price and quantity, then divide the quantity change by the price change to determine your price elasticity coefficient and interpretation.
Frequently asked questions
What does a negative elasticity value mean?
Negative elasticity is normal and expected, indicating that when prices increase, demand decreases, following the basic law of demand in economics.
Is demand elastic if the value is greater than 1?
Yes, if the absolute value exceeds 1, demand is elastic, meaning customers are highly responsive to price changes and will significantly adjust purchases.
How do I use elasticity for pricing decisions?
If demand is elastic, small price cuts can boost revenue. If inelastic, you can raise prices without losing many customers.