Free tool
Price Elasticity Calculator
Enter two price/demand points and get your price elasticity of demand with a plain-English verdict. Then switch to sensitivity mode: test a price change against the conversion impact you expect and see the revenue curve. Free, runs in your browser, no account.
Two price points → elasticity coefficient
Demand can be units sold, signups, conversions — any volume metric measured at both prices.
- Price elasticity of demand
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- Change in demand
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- Change in price
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Sensitivity mode: price change → revenue curve
Test a price move against the demand or conversion impact you expect it to have.
- Revenue after the change
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- Revenue today
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- Revenue change
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- Implied elasticity
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Revenue curve at this sensitivity (−30% to +30% price)
Assumes demand keeps responding at the same rate across the band. Real elasticity shifts at price thresholds — treat the edges as directional.
You just modeled one price change. Competitors make theirs without telling you.
Enter your domain and get alerted when competitors change pricing — Outmano watches their pricing pages and tells you the day a price, a tier, or a discount moves, so your elasticity math never runs on stale inputs.
The price elasticity formula, and how to read the coefficient
Elasticity = % change in demand ÷ % change in price
Raise your price from $50 to $60 and watch demand fall from 200 to 150 units. Against the midpoints, price moved +18.2% and demand moved −28.6%, so elasticity is −28.6 ÷ 18.2 = −1.57. This calculator uses that midpoint (arc) method: each change is measured against the average of the two points, so you get the same coefficient whichever direction the price moved.
The sign is almost always negative — demand falls when price rises — so read the absolute value. Above 1, demand is elastic: volume moves faster than price, discounts can grow revenue, and increases shrink it. Below 1, demand is inelastic: buyers stay put, you have pricing power, and a well-communicated increase drops straight into revenue.
Elasticity isn't a property of your product alone — it's a property of your product inside its competitive set. Demand goes elastic when switching is easy and an obvious substitute sits one tab away at a lower price. The same product reads inelastic in a category it dominates and highly elastic in a crowded one. That's why your pricing strategy and your read on competitive pricing have to move together.
What your elasticity coefficient means
| |E| | Verdict | What it means for pricing |
|---|---|---|
| 0 | Perfectly inelastic | Demand doesn't react to price at all. Rare outside must-have, no-substitute products — raising price raises revenue one-for-one. |
| 0 – 0.5 | Highly inelastic | Demand barely reacts. You have real pricing power: a price increase loses so few customers that revenue goes up. |
| 0.5 – 1 | Inelastic | Demand reacts, but less than price moves. Increases still grow revenue; discounts cost more than the volume they win. |
| 1 | Unit elastic | Demand moves exactly as much as price. Revenue is roughly flat whichever way you move — compete on value, not price. |
| 1 – 2 | Elastic | Demand moves more than price. Discounts win enough volume to grow revenue; increases shrink it. Buyers are comparing you to alternatives. |
| Over 2 | Highly elastic | Demand is very price-sensitive — small moves swing volume hard. Common in crowded categories where switching is easy. |
A positive coefficient means demand moved the same direction as price — usually a data problem (something else changed at the same time), occasionally a genuine prestige effect where a higher price signals quality.
How to run a pricing sensitivity analysis
- Find two clean price/demand points. A past price change, an A/B price test, or two comparable periods at different prices. Keep everything else as constant as you can — a price change that shipped alongside a redesign measures both.
- Measure demand the same way at both points. Units sold, new subscriptions, checkout conversions — any volume metric works, but it has to be the same one, over comparable windows.
- Divide the demand change by the price change. Use midpoint percentages (this calculator does) so the answer doesn't depend on which point you call "before".
- Read the absolute value against the bands above. Above 1: price-sensitive, discounts can pay for themselves. Below 1: pricing power, increases raise revenue.
- Simulate before you ship. Put your proposed change and expected conversion impact into sensitivity mode and look at the revenue curve — the best price is where the curve peaks, not where the coefficient says it must be.
- Re-measure when the market moves. Elasticity shifts when a competitor reprices, launches a cheaper tier, or runs a discount season. Yesterday's coefficient describes yesterday's competitive set.
Working the rest of the pricing math? The Markup Calculator turns cost into price, profit and margin, the SaaS Pricing Model Recommender picks the pricing model that fits how you deliver value, and the Pricing Page Analyzer breaks down any competitor's pricing page in seconds. There's more in the free tools catalog.
Price elasticity calculator FAQ
- How do you calculate price elasticity of demand?
- Divide the percentage change in quantity demanded by the percentage change in price. This calculator uses the midpoint (arc) method — each change is measured against the average of the two points, so the coefficient is the same whichever point you call "before". Example: price goes from $50 to $60 while demand falls from 200 to 150 units. Price changed +18.2% against the $55 midpoint, demand changed −28.6% against the 175 midpoint, so elasticity is −28.6 ÷ 18.2 = −1.57: elastic.
- What does a price elasticity of −1.5 mean?
- Every 1% change in price moves demand about 1.5% in the opposite direction. That is elastic demand: cut price 10% and you'd expect roughly 15% more volume; raise it 10% and expect roughly 15% less. Because volume moves faster than price, increases shrink revenue and well-placed discounts can grow it.
- What is the difference between elastic and inelastic demand?
- Demand is elastic when the coefficient's absolute value is above 1 — buyers react strongly to price, usually because substitutes are easy to find. It is inelastic below 1 — buyers stay put when price moves, which means you have pricing power and increases raise revenue. At exactly 1 (unit elastic), revenue barely moves either way.
- What is a pricing sensitivity analysis?
- A pricing sensitivity analysis tests how a specific price change would move your revenue before you make it. You take your current price and volume, a proposed change, and the demand or conversion impact you expect, and compute the new revenue. The simulator on this page does exactly that, then extends your assumption across a −30% to +30% band so you can see where revenue peaks.
- Is this price elasticity calculator free? Do I need an account?
- Yes, and no account. The calculator runs entirely in your browser and nothing you type is sent to our servers. We only ask for an email if you want to download the result as a PDF.