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Midpoint (Arc) Elasticity Calculator

LAST UPDATE: August 29th, 2018

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What is midpoint elasticity (also known as arc elasticity)?

Midpoint elasticity is an alternate method of calculating elasticity.

Formula

Midpoint Elasticity = (Change in Quantity / Average Quantity) / (Change in Price / Average Price)

Change in Quantity = Q2 – Q1

Average Quantity = (Q1 + Q2) / 2

Change in Price = P2 – P1

Average Price = (P1 + P2) / 2

Example

Quantity at the start is 500. At the end it is 600. Price at the start is 20. At the end it is 30.

Change in Quantity = 600 – 500 = 100

Average Quantity = (500 + 600) / 2 = 1,100 / 2 = 550

Change in Price = $30 – $20 = $10

Average Price = ($20 + $30) / 2 = $50 / 2 = $25

Midpoint Elasticity = (100 / 550) / ($10 / $25) = 0.18 / 0.4 = 0.45

Therefore, midpoint elasticity is 0.45.

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