Price Elasticity of Demand Calculator
Measure how demand responds to price changes for optimal pricing strategy
Price & Quantity Data
Enter before and after values
Before Price Change
After Price Change
Elasticity Guide
|E| > 1: Elastic
Luxury goods, substitutes available
|E| < 1: Inelastic
Necessities, unique products
|E| = 1: Unit Elastic
Proportional response
About Price Elasticity of Demand
Price elasticity of demand measures how sensitive customer demand is to price changes. It's calculated as the percentage change in quantity demanded divided by the percentage change in price.
Elasticity = (% Change in Quantity) / (% Change in Price)
Factors Affecting Elasticity:
- Availability of Substitutes: More substitutes = more elastic
- Necessity vs Luxury: Necessities are typically inelastic
- Time Horizon: Demand becomes more elastic over time
- Budget Share: Larger budget items tend to be more elastic
- Brand Loyalty: Strong loyalty reduces elasticity