How this calculator works
The midpoint method measures each change relative to the average of its endpoints. The initial-value method uses the starting value instead. The tool keeps the elasticity sign: ordinary downward-sloping demand has a negative value. Reverse modes require signed elasticity, not its magnitude. The revenue comparison assumes price times quantity with no other changes.
Formula
Midpoint E = [(Q2 - Q1) / (Q2 + Q1)] / [(P2 - P1) / (P2 + P1)]. Initial-value E = [(Q2 - Q1) / Q1] / [(P2 - P1) / P1]. Revenue = price * quantity.
Worked example
Price rises from $10 to $12 while quantity falls from 120 to 100. Midpoint elasticity is -1 and revenue stays at $1,200. Using starting values instead gives (-20 / 120) / (2 / 10) = -0.833333.
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Frequently asked questions
Why are there two elasticity values?
Finite changes depend on the reference value. The midpoint convention gives the same elasticity if you swap the endpoints.
What does a magnitude above one mean?
Quantity responds more strongly in percentage terms than price. The demand over that interval is elastic.
What if both prices are equal?
There is no non-zero price change to divide by, so the measured elasticity is undefined. Zero starting revenue also leaves revenue percentage change undefined.