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Enter your product details to calculate the change in demand due to price shifts (PED).
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The Price Elasticity of Demand calculator helps evaluate how changes in product pricing impact customer demand. By calculating the PED value and revenue changes, businesses can decide whether to raise prices and sell less, or lower prices and sell more.
Price Elasticity of Demand (PED) is an economic metric that measures how sensitive the quantity demanded of a product is to a change in its price. It helps understand consumer behavior in response to price adjustments.
PED = Percentage Change in Quantity (ΔQ/Q) Percentage Change in Price (ΔP/P)
Alternative representation (midpoint method):
PED = Q₁ - Q₀ (Q₁ + Q₀)/2 ÷ P₁ - P₀ (P₁ + P₀)/2
Scenario: A bakery sells cupcakes at $5 each (100/day). The price is increased to $5.50, and sales drop to 80/day. Calculate PED, revenue, and revenue change.
ΔP% = (5.50 - 5.00) / 5.00 × 100 = 10% increase
ΔQ% = (80 - 100) / 100 × 100 = -20% decrease
PED = ΔQ% / ΔP% = -20% / 10% = -2.0 → Elastic demand
This example explains how to calculate the price elasticity of demand for a single product. It helps you clearly understand the relationship between price changes and demand. With our price elasticity of demand calculator, you can easily run frequent PED calculations and see how pricing decisions affect customer behavior.
There’s no universal “good” PED. It depends on your business goals, product type, and pricing strategy.
Inelastic products are goods whose demand does not change significantly when prices change. Common examples include:
They are considered inelastic products because they are essential or have no close substitutes, meaning consumers continue to buy them even when prices increase.
PED is negative due to the law of demand: as price rises, quantity demanded typically falls.
When the change in demand is large in the opposite direction because of the change in the price of the product then the demand is elastic. On the other hand, if the change in quantity demanded is small when the price changes then the demand is inelastic.
Using the price elasticity of demand (PED) calculator, you can quickly determine whether demand is elastic or inelastic. It helps measure the exact responsiveness of demand to changes in price.
Importance of Calculating PED:
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