What is the formula for Price Elasticity of Demand?

PED = (% Change in Quantity Demanded) ÷ (% Change in Price). Using midpoint formula: PED = [ (Q2 - Q1) / ((Q1 + Q2)/2) ] ÷ [ (P2 - P1) / ((P1 + P2)/2) ].

What does elastic vs inelastic demand mean?

|PED| > 1 means demand is elastic (price sensitive). |PED| < 1 means demand is inelastic (price insensitive, like medicines or basic food).

Price Elasticity of Demand (PED) Calculator

Calculate price elasticity of demand using standard percentage and midpoint formulas. Classify elastic, inelastic, and unitary demand with revenue impact analysis.

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How to Use Price Elasticity of Demand Calculator

Choose between the Midpoint (Arc) Formula or Standard Percentage Change method.
Enter Initial Price (P1) and New Price (P2).
Enter Initial Quantity Demanded (Q1) and New Quantity Demanded (Q2).
View the elasticity coefficient, classification badge, and revenue impact breakdown.
Review the step-by-step mathematical proof and demand curve graph.

Understanding Price Elasticity of Demand

Price Elasticity of Demand (PED) measures how quantity demanded responds to price changes. If a small price rise causes a large sales drop, demand is elastic.

Frequently Asked Questions

What is the formula for Price Elasticity of Demand?: PED = (% Change in Quantity Demanded) ÷ (% Change in Price). Using midpoint formula: PED = [ (Q2 - Q1) / ((Q1 + Q2)/2) ] ÷ [ (P2 - P1) / ((P1 + P2)/2) ].
What does elastic vs inelastic demand mean?: |PED| > 1 means demand is elastic (price sensitive). |PED| < 1 means demand is inelastic (price insensitive, like medicines or basic food).