How to calculate Price elasticity
The Price elasticity formula, with plain worked examples you can check yourself.
Price elasticity = %ΔQ ÷ %ΔP
Worked examples
ΔQ = −30% · ΔP = +10%Price elasticity = 3
ΔQ = −30% · ΔP = +20%Price elasticity = 1.5
ΔQ = −20% · ΔP = +20%Price elasticity = 1
How to use it
- Write down the values for each letter in the formula.
- Do the brackets first, then divide or multiply.
- Check the units before you compare results.
- Compare the answer with last period or with a competitor to see if it is good or bad.
This formula belongs to Money & Prices.
Related terms
Practice Price elasticity with real numbers
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