SPONSORED

Elasticity (Microeconomics) Calculator

LAST UPDATE: August 29th, 2018

Calculator

What is elasticity?

In economics, elasticity is the measurement of how much one thing (such as quantity) changes when another thing (such as price) changes.

Formula

Elasticity = % Change in Quantity / % Change in Price

% Change in Quantity = (Quantity End – Quantity Start) / Quantity Start

% Change in Price = (Price End – Price Start) / Price Start

Example

500 units are produced at the start and 600 at the end. In the same period, cost to produce goes from $20 to $25.

% Change in Quantity = (600 – 500) / 500 = 100 / 500 = 0.20

% Change in Price = ($25 – $20) / $20 = $5 / $20 = 0.25

Elasticity = 0.20 / 0.25 = 0.80

Therefore, elasticity is 0.80.

Sources and more resources