Measure how sensitive demand is to price and whether a price change raises or lowers revenue.
The midpoint (arc) method divides each change by the average of the two values rather than the starting one, which makes the elasticity identical whether you raise or lower the price. Absolute elasticity above one means demand is elastic and a price rise cuts revenue. Elasticity decides whether the right move is to raise price or cut it, and getting the sign and magnitude wrong is an expensive mistake at scale.
Price Elasticity
Elasticity = % change in quantity ÷ % change in price, using midpoint percentages
Elasticity = % change in quantity ÷ % change in price, using midpoint percentages The midpoint (arc) method divides each change by the average of the two values rather than the starting one, which makes the elasticity identical whether you raise or lower the price. Absolute elasticity above one means demand is elastic and a price rise cuts revenue.
Elasticity decides whether the right move is to raise price or cut it, and getting the sign and magnitude wrong is an expensive mistake at scale.
This calculator takes 4 inputs: Original price, New price, Units sold at the original price, Units sold at the new price. The pre-filled defaults are a realistic starting point — replace them with figures from your own environment for a result you can act on.