Enter the price and quantity sold before and after a price change. Get your price elasticity of demand, whether demand is elastic or inelastic, and what the change does to your revenue.
Try a product-type example (every field stays editable):
Price Elasticity of Demand
Demand is sensitive to price. Here a price cut grew total revenue; a price rise would shrink it.
Price elasticity of demand (PED) measures how much the quantity you sell responds to a change in price. It answers the single most important pricing question a seller can ask: if I raise or cut my price, what happens to the number of units I sell, and to my total revenue? The result is a single number. When demand is elastic (a PED above 1), buyers are sensitive to price and a small increase drives a large drop in sales. When demand is inelastic (a PED below 1), buyers barely react, so you can raise prices without losing many sales. This calculator works out that number from your own before-and-after figures and tells you what it means for revenue.
The formula is PED = % change in quantity demanded ÷ % change in price. There are two ways to work out the percentage changes. The midpoint (arc) method, used by default above, divides each change by the average of the old and new values, so you get the same elasticity whether the price went up or down. The simple (point) method divides by the starting value instead, which is quicker but gives a different answer depending on direction. For a price cut from $50 to $40 that lifts unit sales from 100 to 140, the midpoint method gives a 33.3% rise in quantity against a 22.2% fall in price, so PED is 1.50. Elasticity is usually written as an absolute value, so we drop the minus sign that comes from price and quantity moving in opposite directions.
The coefficient falls into one of three bands, and each one points to a different pricing move:
| Elasticity (PED) | Demand is | What it means for you |
|---|---|---|
| Greater than 1 | Elastic | Sales move more than price. Cutting price grows total revenue; raising it shrinks revenue. |
| Exactly 1 | Unit elastic | Sales move in step with price. Total revenue stays roughly the same either way. |
| Less than 1 | Inelastic | Sales barely move. Raising price grows total revenue; cutting it just leaves money on the table. |
The reason elasticity matters is that revenue is price multiplied by quantity, and those two move in opposite directions when you change price. Whether revenue rises or falls comes down to which effect is bigger, and that is exactly what elasticity measures. For an elastic product, the jump in units from a price cut outweighs the lower price, so a discount can lift revenue, while an inelastic product does the opposite. In the worked example, cutting the price from $50 to $40 took revenue from $5,000 to $5,600, a 12% gain, precisely because demand was elastic. Get this backwards, cut prices on an inelastic product or hike them on an elastic one, and you quietly bleed revenue. To turn a target margin into an actual price once you know how sensitive demand is, pair this with our product pricing calculator, and use the discount calculator to see the margin left after a markdown before you run it.
Elasticity is not fixed, it depends on the product and its buyers. Goods with lots of close substitutes, discretionary purchases, and higher-priced items tend to be elastic, because shoppers can easily switch, wait, or walk away. Necessities, habitual buys, and strongly branded products people are loyal to tend to be inelastic. That is why a fashion top or a trendy gadget behaves very differently from an everyday essential or a branded staple, as the preset examples above show. For an online seller this is practical, not academic: it tells you which SKUs you can quietly raise prices on to protect margin, and which ones respond to a promotion with enough extra volume to be worth it. It also explains why the same discount that works on one product flops on another. Our guides on pricing competitively and dynamic pricing go deeper on turning these signals into a pricing strategy across your catalogue.
A calculator gives you elasticity for one price change on one product. Running the business means watching it across a whole catalogue and every channel you sell on, where the same SKU can face different competition and different buyers on Shopee, Lazada, TikTok Shop, and your own store. OneCart syncs your prices, inventory, and orders across all your marketplaces from one place and reports units and revenue by SKU per channel, so you can see how sales actually responded the last time you changed a price and feed those real numbers straight back into this calculator. That is how a rough elasticity estimate turns into a pricing decision you can trust before you roll it out to every listing.
OneCart syncs pricing, inventory, and orders across Shopify, Shopee, Lazada, TikTok Shop, Amazon and more, and reports units and revenue per product.
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