Price Elasticity of Demand Calculator
Compare two observed price and quantity combinations using the midpoint elasticity method.
Signed midpoint elasticityExample-1.22×
- Revenue change
- −$40.00
How to calculate price elasticity of demand
Elasticity = ((Q₂ − Q₁) ÷ average Q) ÷ ((P₂ − P₁) ÷ average P)
The signed midpoint ratio describes these two observations. Seasonality, promotion and competitors may explain the change; this is not causal proof or a demand forecast.
Worked example
An illustrative scenario. “Reset to example” restores it in the calculator.
- Original price
- $10
- New price
- $12
- Original quantity sold
- 100 units
- New quantity sold
- 80 units
Signed midpoint elasticity: -1.22×
Price Elasticity of Demand FAQ
Why use the midpoint method?
Using average price and quantity as the bases gives the same elasticity when the two observations are reversed. Absolute values above one indicate elastic demand across this interval.
Guides for this calculation
Build context around the numbers with worked examples from our guides.
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