Price Elasticity Calculator
Measure how demand responds to price using the midpoint method, and see the revenue consequence.
Free · No signup · By the analysts at Blackridge Research · Updated 2026-07-18
Inputs
Results
What this means
Adjust the inputs to calculate.
About the Price Elasticity Calculator
Price elasticity measures how demand responds to price using the midpoint method.
It is the single most important metric for pricing decisions.
Formula
Elasticity = (ΔQ / Q_avg) / (ΔP / P_avg)
- ΔQ
- — Change in Quantity Demanded
- ΔP
- — Change in Price
- Q_avg
- — Average Quantity — (Q₁ + Q₂) / 2
- P_avg
- — Average Price — (P₁ + P₂) / 2
How to use this calculator
- 1
Enter old price and quantity
Input the original price and quantity demanded.
- 2
Enter new price and quantity
Input the new price and resulting quantity demanded.
- 3
Review the results
See the elasticity coefficient and revenue impact.
Example calculations
SaaS pricing optimization
A software company increased price from $100 to $120 and saw quantity drop from 1000 to 900 units.
Elasticity = ((900-1000)/950) / ((120-100)/110) = -0.58
- Price Elasticity:
- -0.58
- Demand Classification:
- Inelastic
- Revenue Impact:
- +$8,000
Inelastic demand means the price increase raised total revenue.
Interpreting your results
Elastic demand (>1): Lower price increases total revenue; higher price decreases it.
Inelastic demand (<1): Higher price increases total revenue; lower price decreases it.
Need the market data behind this calculator?
The Price Elasticity Calculator is only as good as its inputs. Blackridge Research publishes syndicated market reports with vetted market sizes, growth rates, and competitive landscapes across 40+ industries — and builds custom studies when the shelf report doesn't exist.
Industry applications
Business
- Pricing decisions: optimize prices to maximize revenue and profit.
- Discount planning: understand the volume required to offset a price reduction.
- Competitive response: model the impact of competitor price changes.
Construction
- Construction firms use price elasticity to optimize bid pricing.
- Material suppliers use elasticity to understand demand response to price changes.
Research
- Market research studies measure price elasticity through surveys and experiments.
- Analysts use elasticity to forecast demand under different pricing scenarios.
Common mistakes to avoid
-
✗ Using the wrong elasticity formula
Always use the midpoint method for consistency.
-
✗ Ignoring cross-elasticity
Consider how changes in your price affect demand for competitors' products.
Frequently asked questions
›What is price elasticity of demand?
It measures how sensitive quantity demanded is to a change in price.
›What is a good price elasticity?
It depends on the product. Necessities tend to be inelastic; luxury goods tend to be elastic.
Glossary
- Price elasticity:
- The responsiveness of quantity demanded to a change in price.
- Elastic demand:
- Demand where |elasticity| > 1 — price changes significantly affect quantity.
- Inelastic demand:
- Demand where |elasticity| < 1 — price changes have little effect on quantity.
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