Price Elasticity of Demand Calculator
Enter the initial and new price and quantity demanded to calculate the price elasticity of demand.
Price Elasticity of Demand Calculator
Calculate how sensitive demand is to a change in price.
Price elasticity of demand divides the percentage change in quantity demanded by the percentage change in price. A result greater than 1 in absolute value indicates elastic demand (sensitive to price), while less than 1 indicates inelastic demand (less sensitive).
Example
- With the default values shown above, this calculator returns: Percent Change in Quantity ≈ -15.00; Percent Change in Price ≈ 20.00; Price Elasticity of Demand ≈ -0.75; Demand Category: Inelastic — demand is relatively insensitive to price.
Frequently Asked Questions
Why is elasticity usually negative?
Since price and quantity demanded typically move in opposite directions (higher price, lower quantity demanded), elasticity is usually a negative number — some conventions report it as an absolute value instead.
What does elastic vs. inelastic mean for pricing?
If demand is elastic, raising prices tends to reduce total revenue since the quantity drop outweighs the price increase; if demand is inelastic, raising prices tends to increase total revenue since quantity falls proportionally less.