How demand changes when price changes. The Price Elasticity Calculator takes original price, original quantity sold, new price, new quantity sold and returns price elasticity of demand plus reading, change in revenue, new revenue. Results update as you type, and the formula is shown under the result so you can repeat it in your own spreadsheet.
Pricing and sales metrics decide how much of the value you create you actually keep. Test price changes against margin, not volume alone, and measure the pipeline consistently so forecasts can be trusted. Use the worked example below to check the maths against your own figures.
How the Price Elasticity Calculator works
Elasticity below 1 in absolute terms means a price rise increases revenue despite lost volume; above 1 it reduces revenue. Most branded and specialised products are inelastic within a modest range.
Worked example
With the example values (original price of $100, original quantity sold of 1000, new price of $110, new quantity sold of 900), the price elasticity of demand is -1.11; reading Elastic: demand is sensitive to price, change in revenue -1%, new revenue $99,000.00. Change any figure above and the result updates immediately; use Copy results to paste the summary into a note or email.
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Frequently Asked Questions
How is price elasticity of demand calculated?
elasticity = (% change in quantity) ÷ (% change in price), using the midpoint method.
Which figures do I need?
Original price, original quantity sold, new price, new quantity sold. Take them from the same period and the same set of accounts or reports so the ratio is consistent, and check the example values as a guide to the units expected.
Should I test a price change before rolling it out?
Yes. Model the margin impact here first, then test on a segment or product line and measure volume and margin before applying it everywhere.
