Price Elasticity of Demand Calculator

How to Calculate: Formula & Steps

Applies the standard midpoint arc elasticity formula to avoid direction bias between initial and final price-quantity points.

Step-by-Step Calculation Example

If price increases from $10 to $12 (+18.2%) and sales drop from 100 to 80 units (-22.2%), PED is -1.22 (Elastic demand, total revenue decreases).

Inputs and Assumptions

Enter values that match your project or situation. The calculator uses the following fields and defaults; update them before relying on the estimate.

Initial Price P1 ($)

Default: 10 $

New Price P2 ($)

Default: 12 $

Initial Quantity Sold Q1

Default: 100 units

New Quantity Sold Q2

Default: 80 units

Common Mistakes to Avoid

• Confusing percentage change with absolute unit changes when analyzing price increases.

Practical Use Cases

• E-commerce product pricing strategy
• Economics coursework and business revenue optimization