Use this page to estimate price elasticity of demand, compare old and new total revenue, and visualize how pricing changes affect quantity and revenue outcomes.
Calculator
Example Data Table
These examples show how elasticity can influence total revenue across different pricing situations.
| Scenario | Old Price | New Price | Old Quantity | New Quantity | Elasticity | Revenue Effect |
|---|---|---|---|---|---|---|
| Discounted streaming plan | $15 | $13 | 900 | 1120 | -1.62 | Revenue rises because demand is elastic. |
| Essential medicine pricing | $24 | $26 | 1500 | 1460 | -0.33 | Revenue rises because demand is inelastic. |
| Basic utility plan | $40 | $42 | 800 | 780 | -0.48 | Revenue rises with a small quantity drop. |
| Luxury footwear launch | $90 | $80 | 300 | 390 | -1.85 | Revenue rises after the price cut. |
| Near unitary case | $50 | $45 | 1000 | 1111 | -1.00 | Revenue stays close to unchanged. |
Formula Used
1) Total Revenue Formula
Total Revenue = Price × Quantity Demanded
2) Midpoint Elasticity Formula
PED = (% Change in Quantity Demanded) ÷ (% Change in Price)
% Change in Quantity = ((Q2 - Q1) ÷ ((Q1 + Q2) ÷ 2)) × 100
% Change in Price = ((P2 - P1) ÷ ((P1 + P2) ÷ 2)) × 100
3) Simple Percentage Elasticity Formula
% Change in Quantity = ((Q2 - Q1) ÷ Q1) × 100
% Change in Price = ((P2 - P1) ÷ P1) × 100
PED = (% Change in Quantity Demanded) ÷ (% Change in Price)
4) Revenue Interpretation
If absolute elasticity is greater than one, demand is elastic.
If absolute elasticity is less than one, demand is inelastic.
If absolute elasticity is near one, revenue often changes very little.
How to Use This Calculator
- Enter the old price and the new price.
- Enter the old quantity demanded and new quantity demanded.
- Choose midpoint or simple percentage calculation.
- Set your preferred currency symbol and decimals.
- Click the calculate button to generate the result.
- Review elasticity, classification, and revenue changes above the form.
- Use the CSV and PDF buttons to export results.
- Inspect the chart and example table for added context.
Frequently Asked Questions
1) What does price elasticity of demand measure?
It measures how strongly quantity demanded responds to a price change. A larger absolute value means buyers react more strongly when price moves up or down.
2) Why does the calculator show a negative elasticity?
Demand usually falls when price rises. That inverse relationship creates a negative sign. Analysts often focus on the absolute value when classifying demand as elastic, unitary, or inelastic.
3) When should I use the midpoint method?
Use the midpoint method when you want a balanced estimate between two points. It reduces direction bias and is commonly preferred for comparing old and new price situations.
4) What does inelastic demand mean for revenue?
Inelastic demand means buyers change quantity less than price changes. When price rises, total revenue often increases. When price falls, total revenue often decreases.
5) What does elastic demand mean for revenue?
Elastic demand means buyers react strongly to price changes. Lower prices can lift revenue if quantity grows enough. Higher prices can reduce revenue when sales fall sharply.
6) Can I use this for products and services?
Yes. The calculator works for goods, services, subscriptions, tickets, and many other offerings, as long as you have old and new price and quantity data.
7) Why is total revenue important here?
Revenue connects pricing to business impact. Elasticity explains demand response, while total revenue shows whether the pricing move actually improved or weakened earnings from sales.
8) What happens if price does not change?
Elasticity cannot be calculated when price change is zero, because price is the denominator. The calculator blocks that case and asks for a valid price difference.