Price Elasticity of Demand Calculator | Free Online Tool

Price Elasticity of Demand Calculator

Calculate the responsiveness of quantity demanded to a change in price with our easy-to-use calculator. Perfect for students, economists, and business professionals.

Calculator

Initial Price ($)

USD

New Price ($)

USD

Initial Quantity

Units

New Quantity

Units

Price Elasticity of Demand

-2.50

Interpretation:

Elastic demand (|PED| > 1). A 1% increase in price leads to a 2.5% decrease in quantity demanded. Consumers are responsive to price changes.

About Price Elasticity

Price elasticity of demand (PED) measures how much the quantity demanded of a good responds to a change in its price. It's calculated as the percentage change in quantity demanded divided by the percentage change in price.

PED = (% Change in Quantity Demanded) / (% Change in Price)

The formula can be expressed as:

E_d = [(Q₂ - Q₁) / ((Q₂ + Q₁)/2)] ÷ [(P₂ - P₁) / ((P₂ + P₁)/2)]

Types of Elasticity

Elastic Demand (|PED| > 1)

Quantity demanded changes more than proportionally to price changes. Typical for luxury goods.

Inelastic Demand (|PED| < 1)

Quantity demanded changes less than proportionally to price changes. Typical for necessities.

Unitary Elastic (|PED| = 1)

Quantity demanded changes exactly proportionally to price changes.