Price Elasticity of Demand

The Price Elasticity of Demand calculator computes the ratio of the percent change in quantity demanded and the percent change in price.  

INSTRUCTIONS:   Enter the following:

• (CD)  This it the percent Change in Quantity Demanded
• (CP)  This is the percent Change in Price

Price Elasticity of Demand (PE_D):  The calculator returns the ratio as a real number (e.g. 4).  However, this can be automatically converted to a percent (e.g. 400%) via the pull-down menu.

The Math / Science

The formula for Price Elasticity of Demand is:

          PED = CD / CP

where:

• PED = Price Elasticity of Demand
• CD = Percent Change in Quantity Demanded
• CP = Percent Change in Price

Note:  A more reliable way to compute price elasticity of demand is via the Midpoint Method.  The formula for Midpoint Method of Price Elasticity of Demand is:

`PED = ((Q_2 - Q_1) ÷ (Q_2 + Q_1)"/"2) / ((P_2 - P_1) ÷ (P_2 + P_1)"/"2) = ("Percent Change in Quantity")/("Percent Change in Price")`

where:

• PED is the Price Elasticity of Demand
• P₁ this is the first price point
• P₂ this is the second price point
• Q₁ is the quantity point associated with the first price point (P₁)
• Q₂ is the quantity point associated with the second price point (P₂)

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• Midpoint Method for Price Elasticity of Demand
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• Basic Price Elasticity of Demand.
• Midpoint Method of Price Elasticity of Demand
• Midpoint Method of Price Elasticity of Demand with automatic Quantity Unit Handling:
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  • Price Elasticity of Demand (Area Units)
  • Price Elasticity of Demand (Weight or Mass Units)
  • Price Elasticity of Demand (Length Units)
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Reference:

• Mankiw, N. Gregory. "Chapter 5:The Elasticity of Demand." Principles of Macroeconomics. 6th ed. Mason, OH: Thomson/South-Western, 2004. 91. Print.
• “Chapter 7 Consumer Choice and Elasticity.” AP Microeconomics 2018, by Eric R. Dodge, McGraw Hill Education, 2017.