ParrotNotes

Price Elasticity Calculator

Calculate price elasticity of demand with the midpoint method from two prices and quantities, and see what a price change does to revenue. The simple percent method is shown beside it, and a what-if mode estimates volume and revenue at a planned price.

Your numbers

$
$

Units, orders or subscriptions sold in a period (a month, a quarter). Use the same period for both quantities.

Price elasticity of demand (midpoint)

–

Demand is
–
Change in quantity (midpoint)
–
Change in price (midpoint)
–
Elasticity, simple % method
–
Revenue before
–
Revenue after
–
Revenue change
–

Elasticity is shown as a positive number, as most textbooks do: demand falls when price rises, so the raw figure is negative.

Two data points give one arc of the demand curve. Elasticity differs at other prices, so a big price change is a rougher estimate than a small one.

The calculation runs in your browser and ParrotNotes does not store your numbers. They sit in the page address so you can bookmark or share the result.

How price elasticity is worked out

Price elasticity of demand measures how much the quantity sold responds to a change in price: the percent change in quantity divided by the percent change in price. Because demand falls when the price rises, the raw figure is negative; textbooks such as OpenStax's Principles of Economics report it as an absolute value, and so does this page.

The midpoint (arc) method measures each percent change against the average of the old and new values: (Q2 − Q1) ÷ ((Q1 + Q2) / 2) × 100, and the same for price. OpenStax's worked example takes a price rise from $120 to $130 that cuts sales from 1,800 to 1,600 units: quantity falls 11.76%, price rises 8.0%, and the elasticity is 1.47.

Elastic, inelastic or unit elastic

An elasticity above 1 is elastic: buyers react strongly, and quantity moves by a bigger share than price. Below 1 is inelastic: quantity moves by a smaller share. Exactly 1 is unit elastic, a proportional response.

That label tells you what a price change does to revenue (price × quantity). OpenStax puts it plainly: with elastic demand a price rise is more than offset by the fall in quantity, so revenue falls; with inelastic demand the fall in quantity is smaller, so revenue rises; at unit elasticity revenue is unchanged.

Using elasticity to plan a price change

The forecast mode turns the midpoint formula round: given an elasticity, your current price and volume and a planned price, it solves for the volume at the new price and shows revenue before and after. Take the elasticity from a real price change in your own numbers (measure it in the first mode), not from a textbook table.

Treat the answer as an estimate. One elasticity describes one stretch of the demand curve, measured when nothing else changed. A competitor's move, a season, a big account signing or churning, or how the increase is explained to customers can all move volume as much as the price did. For margin, run the new price through the margin calculator as well.

For sales leaders planning a price increase

The number in the spreadsheet is half the story. The other half is what customers say when they hear the new price: who pushes back, who asks for a longer contract, who mentions a competitor by name. Those conversations are where you learn whether your elasticity is closer to 0.3 or 1.3.

Sources, each read on 2026-10-29. Results are estimates from your own numbers, not a prediction of how your customers will act:

More on pricing conversations: Handling the price objection, Sales negotiation, Objection handling.

Hear how customers react to the new price

Whether a price increase sticks shows up on calls and visits first: the pushback, the requests for a discount, the competitor someone names. Record those conversations in ParrotNotes and get a transcript, a summary and the action items, so the reaction is in writing before the next pricing meeting.

Get Started Free

Related tools

Price elasticity FAQ