The price elasticity of demand calculator works out price elasticity of demand, revenue increase and initial revenue from initial price, final price, initial quantity and final quantity. Enter what you have and the relationship is applied straight away, so you get the answer without working through the algebra yourself.
What Is the Price Elasticity of Demand Calculator?
The price elasticity of demand calculator takes initial price, final price, initial quantity and final quantity and turns them into price elasticity of demand, revenue increase and initial revenue.
It is the kind of calculation you would otherwise do on the back of an envelope: mechanical, repeatable and easy to get subtly wrong without noticing.
How the Price Elasticity of Demand Figure Is Built
Each result is calculated from the ones before it, so the working is fully visible. That matters when the answer is going to be quoted to somebody else and you need to be able to explain where it came from.
The figures are exactly as good as the assumptions underneath them. Check the rates, the periods and the tax treatment before you rely on the result.
Reading the Result Sensibly
A small change in an input can move the result by much more than you would expect, particularly where the calculation divides by one of the figures you supplied. That is worth understanding before you rely on a figure.
For anything that will be committed to, write the inputs down beside the result. A number you can reproduce is worth far more than one you cannot explain.
A Worked Example
Working through an example, with initial price set to 10, final price set to 5, initial quantity set to 2, the calculator returns price elasticity of demand of -2.88235, and final revenue of 500, and initial revenue of 20. Substitute your own figures and the same steps produce the same kind of answer.
Frequently Asked Questions
What do I need to work out price elasticity of demand?
Enter initial price, final price, initial quantity and final quantity. The calculator then works through the relationship and reports price elasticity of demand, revenue increase and initial revenue.
What does the price elasticity of demand actually calculate?
It takes initial price, final price, initial quantity and final quantity and converts them into price elasticity of demand, revenue increase and initial revenue using the standard relationship for this problem. Each step is applied in turn, so every output is traceable back to the numbers you typed in.
How should I enter initial price?
Use the value you actually have, in the unit shown next to the field. Enter every value in the same unit system. The calculator assumes the figures you supply are consistent, so it cannot correct a mistake that happens before the calculation starts.
Does anything you type get stored?
No. The whole calculation runs inside your browser, and nothing you enter is uploaded, logged or sent anywhere.
Do I have to fill in every field?
Only the fields a particular result depends on. If you leave one blank, the results that need it simply show a note instead of a number, and everything else still works.