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Price Elasticity Calculator

Calculate how sensitive your customers are to price changes to optimize your pricing strategy.

Initial State

$

New State (After Price Change)

$

Results

Fill in the form and click "Calculate" to see your price elasticity results

Understanding Price Elasticity

What is Price Elasticity of Demand? Price elasticity measures how responsive customer demand is to changes in price. It tells you the percentage change in quantity demanded divided by the percentage change in price.

How to interpret the results:

  • PED > 1 (Elastic): Demand is highly responsive to price changes. A small price change leads to a larger percentage change in quantity demanded.
  • PED = 1 (Unit Elastic): Demand changes proportionally to price changes. A 10% price increase leads to a 10% decrease in quantity demanded.
  • PED < 1 (Inelastic): Demand is relatively unresponsive to price changes. Price changes have a smaller impact on quantity demanded.

Business Applications: Understanding price elasticity helps optimize pricing strategies:

  • For elastic products, lowering prices may increase total revenue
  • For inelastic products, raising prices may increase total revenue
  • Elasticity can vary by customer segment, time of year, and competitive environment

Limitations: This calculator assumes a linear relationship between price and demand within the range analyzed. In reality, elasticity can vary at different price points and may be affected by external factors not captured here.

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