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Price Elasticity Calculator

Elasticity = % change in quantity ÷ % change in price. If demand is inelastic (under 1), raising the price grows revenue.

Calculator
Result
Elasticity 0.80
% price change10.00%
% quantity change-8.00%
Elasticity (absolute)0.80
Old revenueKES 100,000.00
New revenueKES 101,200.00

Inelastic, raising price grew revenue.

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How to use elasticity

Test a price change on a small SKU subset. Measure 4 weeks. Compute elasticity. Roll out or roll back.

Veira can run A/B price tests per branch and report elasticity automatically.

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Worked examples

Old 100 × 1000 vs New 110 × 920
  • +10% price, -8% qty → elasticity 0.8 (inelastic) · rev rises from 100k to 101.2k

Frequently asked questions

How do I run a clean test?
One branch test, one branch control, four weeks, same season.
Why does elasticity matter?
It is the difference between price changes that grow profit and price changes that shrink it.
Are essentials inelastic?
Often yes (salt, bread). Luxuries are elastic.
Does Veira measure elasticity?
Yes. Veira runs controlled price experiments per branch.
Should I always raise prices on inelastic SKUs?
Yes, within consumer fairness.

Doing this by hand every time? Veira runs the same calculation automatically on every sale, no spreadsheet required.

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