The Price Elasticity of Demand

Initializing live version
Download to Desktop

Requires a Wolfram Notebook System

Interact on desktop, mobile and cloud with the free Wolfram Player or other Wolfram Language products.

The price elasticity of demand is defined by , where is the price and is the quantity demanded. The price elasticity is a measure of how sensitive the quantity demand is to changes in the price.


This Demonstration shows two ways to calculate the price elasticity of demand: the point elasticity formula and the arc elasticity formula. The point elasticity formula is only useful for data points close to each other in value. Once points become too far apart, the arc elasticity formula is more accurate: .


Contributed by: Sarah Lichtblau (March 2011)
Open content licensed under CC BY-NC-SA



The point elasticity refers to elasticity between two points on the demand curve, not the derivative of the demand curve at a point. The arc elasticity method is also known as the midpoint method.

Note that if , can be greater than , which is not possible in the real world.

Feedback (field required)
Email (field required) Name
Occupation Organization
Note: Your message & contact information may be shared with the author of any specific Demonstration for which you give feedback.