Demand change from elasticity
Price elasticity says by how many percent demand moves when the price moves 1%. Enter an elasticity and a price change to see the change in demand worked out three ways, side by side.
Example numbers — the price change is hypothetical and not tied to any actual tariff plan.
First-order · change in quantity −5%. If the price rises 10%, quantity goes from 1,000 to 950 and spending (price × quantity) rises 4.5%.
If the price rises 10%, quantity goes from 1,000 to 950 and spending (price × quantity) rises 4.5%.
| Method | Δ quantity | Q₁ | Δ spending |
|---|---|---|---|
| ● First-orderThe guide’s definition (p.24): |ε| × price change | −5% | 950 | +4.5% |
| ■ MidpointSupplement — the midpoint formula (guide p.14) solved backwards | −4.65% | 953.49 | +4.88% |
| ▲ Constant elasticitySupplement — assuming demand Q = k·P^(−|ε|) | −4.65% | 953.46 | +4.88% |
The three methods differ by 0.35 percentage points. The bigger the price change, the more the answer depends on what the change is measured from.
The backward midpoint formula and the constant-elasticity curve are supplements outside the guide. Put the midpoint Q₁ and the two prices into the two-point elasticity tool and you get the same |ε| back.
Not in this calculation
- Shifts of the demand curve itself (income, prices of substitutes) — only movement along it
- Supply’s response and the new equilibrium price
- Shortage and consumer surplus under a price cap — see the price ceiling tool
- How a short-run response grows into a long-run one — compare two values only
- Any real tariff plan or forecast of Korean demand — the price change is hypothetical
Using the example values
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