What is Price Elasticity of Demand (PED)?

PED is a measure of how sensitive your customers are to price changes. It is calculated as the % change in quantity demanded divided by the % change in price.

What does "Inelastic" demand mean?

If your demand is inelastic (PED < 1), sales volume doesn't drop much when you raise prices. This usually means you have a strong brand, unique product, or high customer loyalty.

Why should I raise my prices?

If your PED is low, a price increase of 10% might only lead to a 2% drop in volume, leading to much higher total revenue and significantly better net margins.

How do I test price elasticity?

Perform A/B tests on two similar products or run a short-duration promotion to see how much volume increases when the price drops by a specific amount.

Price Elasticity Calculator | Free Price Elasticity Calculator Tool

Product & Category

Product Category

Product Type

Brand Positioning

Competitive Intensity

Product Category

Product Type

Brand Positioning

Competitive Intensity

Current & Proposed Pricing

Current Price

₹

Current Monthly Volume

Current Conversion Rate

%

Proposed New Price

₹

Price Change Reason

Current Price

₹

Current Monthly Volume

Current Conversion Rate

%

Proposed New Price

₹

Price Change Reason

Cost Structure

Variable Cost per Unit

₹

Fixed Costs (Monthly)

₹

Target Margin

%

Variable Cost per Unit

₹

Fixed Costs (Monthly)

₹

Target Margin

%

Customer Data

Avg Customer LTV

₹

Repeat Purchase Rate

%

Price-Aware Customer %

%

Avg Customer LTV

₹

Repeat Purchase Rate

%

Price-Aware Customer %

%

Competitor Pricing

Competitor A Name

Competitor A Price

₹

Competitor B Name

Competitor B Price

₹

Competitor C Name

Competitor C Price

₹

Market Leader Price

₹

Step 1 of 2

Competitor A Name

Competitor A Price

₹

Competitor B Name

Competitor B Price

₹

Competitor C Name

Channel Mix

Website %

%

Marketplace %

%

Social Commerce %

%

Website %

%

Marketplace %

%

Social Commerce %

%

Seasonality & Discounts

Current Season

Seasonal Multiplier

x

Avg Discount %

%

Discount Frequency

Promo Sensitivity

Current Season

Seasonal Multiplier

x

Avg Discount %

%

Discount Frequency

Promo Sensitivity

A/B Testing Parameters

Test Duration

days

Test Traffic %

%

Statistical Confidence

%

Test Duration

days

Test Traffic %

%

Statistical Confidence

%