Price Elasticity of Demand
How much sales volume changes in response to a price change — the missing variable in most price-change math.
Price elasticity measures the percentage change in quantity demanded for a given percentage change in price. Demand is "elastic" when a small price change causes a large volume shift, and "inelastic" when volume barely moves even with a meaningful price change.
Most price-change calculations can only show the required or break-even volume change needed to keep profit flat — they can't tell you whether customers will actually respond that way. Elasticity is what answers that second question, typically estimated from historical pricing tests rather than calculated from a formula alone.
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