Price Elasticity Calculator

Price elasticity measures how quantity demanded responds to price changes. Elasticity = % change in quantity ÷ % change in price. Elastic products (|E| > 1): consumers switch away when prices rise. Inelastic (|E| < 1): consumers keep buying despite price changes. Essentials (food, petrol) are inelastic; luxuries and substitutes are elastic.

10% price increase caused 15% quantity drop. Elasticity = -1.5 (elastic). Revenue impact: (1 + 0.10) × (1 - 0.15) - 1 = -6.5%. Price increase hurt revenue. Lower prices would likely help with this elastic product. Flip: 10% price increase with 5% quantity drop = -0.5 elasticity (inelastic), revenue +4.5% - price increase helped.

Elasticity informs pricing strategy. Inelastic products can raise prices to increase revenue. Elastic products risk revenue loss from price hikes. Most businesses discover elasticity only through testing - A/B price tests on small customer segments before rolling out pricing changes. Retail regularly tests 5-15% price swings to map elasticity curves.

A worked example

Try the defaults: price change of 10%, quantity change of -15%, current price of 100, current quantity of 1,000. The tool returns -1.50. You can adjust any input and the result updates as you type — no submit button, no reload. That's the real power here: seeing how sensitive the output is to one or two assumptions.

What moves the number most

The result responds to Price Change %, Quantity Change %, Current Price, and Current Quantity.

The formula behind this

Elasticity = quantity change % ÷ price change %. Revenue impact = (1 + price %) × (1 + quantity %) - 1. Everything the calculator does is shown in the formula box below, so you can check the math against your own spreadsheet if you want.

What the score tells you

Headline financial numbers — income, savings, debt — each tell part of the story. This calculation stitches several together into a single read you can track over time. The value is in the direction, not the absolute number.

What this doesn't capture

The score is a composite of the inputs you provide. Life context — job security, family obligations, health, housing — doesn't appear in the math but shapes the real picture. Use the number as a prompt, not a verdict.