EconixaECONOMICS FUNDAMENTALS

Interactive calculator

Elasticity Calculator

Enter two prices and the quantities demanded at each. The calculator applies the midpoint formula and classifies demand as elastic (|E| > 1), unit-elastic (|E| = 1), or inelastic (|E| < 1). Example: price 10 to 8, quantity 100 to 140 gives E = -1.5, elastic — so the price cut raises total revenue.

Price Elasticity of Demand

Midpoint (arc) formula

Elasticity E = -1.500
Elastic (|E| > 1)
Steps
  1. Average quantity: (Q₁ + Q₂) ÷ 2 = (100.00 + 140.00) ÷ 2 = 120.00
  2. %ΔQ = (Q₂ − Q₁) ÷ avg Q = 40.00 ÷ 120.00 = 0.3333 (33.33%)
  3. Average price: (P₁ + P₂) ÷ 2 = (10.00 + 8.00) ÷ 2 = 9.00
  4. %ΔP = (P₂ − P₁) ÷ avg P = -2.00 ÷ 9.00 = -0.2222 (-22.22%)
  5. E = %ΔQ ÷ %ΔP = 0.3333 ÷ -0.2222 = -1.500
  6. Classification by |E| = 1.500: elastic — quantity responds more than proportionally to price.
Why the midpoint?

Using averages as the base removes the direction problem: going from P₁ to P₂ gives the same magnitude as going from P₂ to P₁. The negative sign just reflects the law of demand — classification uses the absolute value.

How to use it

  1. Enter the original price and quantity.

  2. Enter the new price and quantity.

  3. Read the elasticity, classification, and revenue implication.

What you will learn

  • Apply the midpoint elasticity formula.
  • Classify demand from the elasticity value.
  • Predict revenue effects of a price change.