Understanding how your customers respond to price changes is crucial for maximising revenue and market share. Our free price elasticity calculator helps you analyse customer price sensitivity and identify the optimal price point for your products or services.
Whether you’re a business owner, marketing manager, or pricing analyst, this tool will help you make data-driven pricing decisions based on established economic principles.
Price Elasticity Calculator
Calculate how responsive the quantity demanded is to changes in price. Enter at least three price points and their corresponding unit sales.
Price Elasticity of Demand
The price elasticity indicates how responsive quantity demanded is to changes in price.
Demand Curve Visualisation
Revenue Optimisation
Based on the data, the revenue-optimal price point is approximately –.
What is price elasticity?
Price elasticity of demand measures how responsive customer demand is to changes in price. It answers the critical question: “If I change my price by X%, how much will my sales volume change?”
Key insights from elasticity analysis:
- Elastic demand (elasticity > 1): Customers are highly price-sensitive. Small price increases lead to large decreases in demand.
- Inelastic demand (elasticity < 1): Customers are less price-sensitive. You can raise prices without significantly reducing demand.
- Unit elastic demand (elasticity = 1): Price changes are exactly offset by demand changes.
Understanding your product’s elasticity helps you develop more effective pricing strategies, promotional campaigns, and revenue forecasts.
How to use the free online price elasticity calculator
- Enter your price points and corresponding sales quantities from historical data or test scenarios
- Click “Calculate optimization” to analyse price elasticity
- Review the results:
- Price elasticity coefficient
- Optimal price point for maximum revenue
- Detailed elasticity analysis by price segment
- Interactive demand and revenue curves
For best results, use at least 3-4 data points from real sales data. The more price points you enter, the more accurate your analysis will be.
Frequently asked questions
What is a good price elasticity coefficient? There’s no universally “good” elasticity coefficient. The ideal elasticity depends on your business goals. Inelastic demand (coefficient < 1) gives you flexibility to raise prices, while elastic demand (coefficient > 1) means you should focus on volume.
How do I get the data for this calculator? You can use historical sales data at different price points, run pricing tests, analyse competitor data, or use industry benchmarks. The most accurate results come from your own sales data.
How accurate is this price elasticity tool? The accuracy depends on the quality of your input data and how well your market follows the constant elasticity model. This tool provides directional guidance based on established economic principles.
Can I use this for subscription pricing? Yes, you can analyse subscription pricing by entering different price points and the corresponding number of subscribers at each price.