Price elasticity of supply calculator
Measure supply responsiveness between two observations using midpoint percentages.
Formula
Elasticity = |[(Q2−Q1)/(Q2+Q1)] / [(P2−P1)/(P2+P1)]|.
Elasticity magnitude ≈ abs((((120)-(100))÷((120)+(100)))÷(((12)-(10))÷((12)+(10))))
How to use
- Enter two different positive prices in one currency.
- Enter the corresponding positive quantities in the same units.
- Read the absolute midpoint elasticity.
Examples
- Price 10 to 12 and quantity 100 to 150: elasticity = 2.2.
Frequently asked questions
What does a value of 1 mean?
Quantity and price have equal proportional changes; above 1 is elastic, below 1 inelastic.
Why are identical prices rejected?
The percentage price change would be zero, making the ratio undefined.
Does this prove a price effect?
No. Use comparable supply observations with other conditions held constant.
Sources
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