---
title: "Price Elasticity of Demand Calculator | Product Metrics"
description: "Free price elasticity of demand calculator: two prices and units sold give elasticity (midpoint or simple), its class and the revenue and profit effect."
canonical: "https://www.productmetrics.io/price-elasticity-calculator"
pageType: feature
language: en
publisher: "Product Metrics"
author: "Berend Vrakking"
dateModified: 2026-10-28
---

> Content index: https://www.productmetrics.io/llms.txt

# Price elasticity of demand calculator

Enter two prices and the units you sold at each. The calculator gives the price elasticity of demand by the midpoint (arc) method or the simple percentage method, says whether demand is elastic, unit elastic or inelastic, and shows what the price change did to revenue and, with a unit cost, to profit.

_Elasticity compares units sold at two prices. Anything else that changed between the two periods (season, stock, ads, competitor prices) is in the number too._

## Every step behind the numbers, worked through for the start values.

Illustrative data. A shop lowered a product from €100.00 to €90.00. It sold 50 units at the old price and 60 units at the new price. One unit costs €60.00.

| Step | Calculation | Result |
| --- | --- | --- |
| Change in units (midpoint) | (60 − 50) ÷ ((50 + 60) ÷ 2) | +18.18% |
| Change in price (midpoint) | (€90.00 − €100.00) ÷ ((€100.00 + €90.00) ÷ 2) | -10.53% |
| Elasticity | +18.18% ÷ -10.53% | -1.73 |
| Demand is | 1.73 is above 1 | Elastic |
| Elasticity (simple method) | +20.00% ÷ -10.00% | -2.00 |
| Revenue before | €100.00 × 50 | €5,000.00 |
| Revenue after | €90.00 × 60 | €5,400.00 |
| Revenue change | €5,400.00 − €5,000.00 | +€400.00 (+8.0%) |
| Profit before | (€100.00 − €60.00) × 50 | €2,000.00 |
| Profit after | (€90.00 − €60.00) × 60 | €1,800.00 |
| Profit change | €1,800.00 − €2,000.00 | -€200.00 (-10.0%) |
| Units needed to keep the old profit | €2,000.00 ÷ (€90.00 − €60.00) | 66.7 |

Demand is elastic, so the cut raised revenue by €400.00. Profit still fell by €200.00: each unit now earns €30.00 instead of €40.00, and 60 units fall short of the 66.7 needed to keep the old profit. Elasticity says how units respond. Your margin decides whether the response pays.

## How to read the result, and what to check next.

- **Elastic: above 1.** Units change by more than the price. A lower price raises revenue and a higher price lowers it. Decision: whether a price cut can win enough extra units to pay.
- **Unit elastic: equal to 1.** Units change by as much as the price, so revenue stays the same. Decision: none from revenue alone; read profit.
- **Inelastic: below 1.** Units change by less than the price. A higher price raises revenue and a lower price lowers it. Decision: whether a price rise is worth the units you lose.
- **The sign.** Elasticity is normally negative: a higher price sells fewer units. Read the absolute value for the class. A positive value means something besides the price moved the units.
- **Revenue is not profit.** Revenue can rise while profit falls. Enter a unit cost to see both, and the units a new price needs to keep your profit.
- **Midpoint or simple.** The midpoint method divides by the average of old and new, so direction does not matter. The simple method divides by the old value. For small changes they agree; for large ones they do not.

## The price that maximises profit, under one strong assumption.

If demand has the same elasticity at every price and your unit cost is constant, profit is highest at a price of unit cost × e ÷ (e − 1). Here e is the absolute elasticity, and it must be above 1. This is a reference point from a model, not a forecast.

- **Why the formula holds.** Profit is (price − cost) × units. With units falling as a constant power of the price, its slope is zero where price − cost equals price ÷ e. Rearranged, that is price = cost × e ÷ (e − 1).
- **Worked example.** Illustrative data. With e = 1.7273 and a unit cost of €60.00, the price is €60.00 × 1.7273 ÷ (1.7273 − 1) = €60.00 × 2.375 = €142.50.
- **Elasticity of 1 or below.** Under this assumption profit keeps rising with the price, so there is no highest point. Real demand drops off at some price, and this model cannot find it.
- **Where it breaks.** Elasticity measured between €90.00 and €100.00 says little about €142.50. It also changes with season, stock, ad spend and competitor prices. Change prices in small steps and measure again.

## Your own price is one lever, competitor prices are another.

This calculator measures how your units respond to your own price. How your units respond to a competitor’s price is cross-price elasticity: % change in your units ÷ % change in their price. A positive value means the products are substitutes.

Competitor Prices in Product Metrics shows your price position against comparable competitor products. It makes no price recommendations and does not measure elasticity.

- [Competitor Prices](https://www.productmetrics.io/competitor-prices)
- [Price elasticity of demand, defined](https://www.productmetrics.io/glossary/price-elasticity)

## What this number cannot tell you, and how to make it more reliable.

- **Why units changed.** Two periods give one number, and every change in between is in it: season, stock, ads, promotions and competitor prices. Change one product at a time and compare periods of equal length.
- **Other price points.** Elasticity from two prices describes that range only. It is not a demand curve.
- **A whole shop.** Elasticity belongs to one product. A shop-wide figure describes none of its products.
- **Small volumes.** A few sales per week make the number noisy. Treat a result from low volumes as a hint, not a measurement.

## Price elasticity questions, answered.

### How do you calculate price elasticity of demand?

Divide the percentage change in units sold by the percentage change in price. With the simple method, €100.00 to €90.00 is -10.0% and 50 to 60 units is +20.0%, so the elasticity is -2.00.

### What is the midpoint method for price elasticity?

It divides each change by the average of the old and new values instead of the old value. Units: 10 ÷ 55 = +18.18%. Price: -€10.00 ÷ €95.00 = -10.53%. Elasticity: -1.73. Swap old and new and you get the same result.

### What counts as elastic, unit elastic and inelastic?

Look at the absolute value. Above 1 is elastic: units change by more than the price. Exactly 1 is unit elastic. Below 1 is inelastic: units change by less than the price. An elasticity of -1.73 has an absolute value of 1.73, so demand is elastic.

### Does a price cut always raise revenue?

No. It raises revenue only when demand is elastic. Even then, profit can fall. In the example the cut raised revenue by €400.00 and lowered profit by €200.00, because each unit earns €10.00 less and 60 units are fewer than the 66.7 needed.

### How do you find the price that maximises profit?

Only under an assumption: demand with the same elasticity at every price and a constant unit cost. Then the price is unit cost × e ÷ (e − 1) for an absolute elasticity e above 1. With e = 1.7273 and a unit cost of €60.00 that is €142.50. Real elasticity changes with price, so use it as a reference point and test in small steps.

## Embed this calculator

Paste this script tag into your own page to show the calculator there, with the same maths and no sign-up. It fits the width of your page, resizes with the calculator and follows the visitor’s light or dark setting.

The script adds the calculator and a link to the full version under it. Keep the attribution link: it credits the calculator.

`<script src="https://www.productmetrics.io/embed.js" data-calculator="price-elasticity-calculator" async></script>`

## Related pages.

- [Price elasticity of demand](https://www.productmetrics.io/glossary/price-elasticity): The definition, with the same example per product.
- [Competitor Prices](https://www.productmetrics.io/competitor-prices): See your price position against comparable competitor products.
- [Competitive pricing examples](https://www.productmetrics.io/blog/competitive-pricing-examples): Worked cases of matching a competitor’s price, and the extra orders it needs.
- [Markup and margin calculator](https://www.productmetrics.io/margin-calculator): Margin, markup and selling price from your cost.
- [Contribution margin calculator](https://www.productmetrics.io/contribution-margin-calculator): The margin a price change takes from.
- [Break-even ROAS calculator](https://www.productmetrics.io/break-even-roas-calculator): The ROAS each product needs at its new price.
- [Markup vs margin](https://www.productmetrics.io/glossary/markup-vs-margin): Use margin, not markup, to work out the sales a cut needs.
- [Product Segmentation](https://www.productmetrics.io/product-segmentation): Segment products by advertising clicks and return.

## See which products drive your revenue, and which don’t.

Product Metrics segments your products by advertising clicks and return against your target, then writes each segment to a Merchant Center label your campaigns use.

- [Analyse your products for free](https://app.productmetrics.io/): Log in with Google, no credit card

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Written by Berend Vrakking, founder of Product Metrics. Last updated 2026-10-28.

HTML version: https://www.productmetrics.io/price-elasticity-calculator