Price elasticity — midpoint formula
Price elasticity is the number for how far demand moves when the price changes. Between two points it uses the midpoint formula, with the average of the two values as the base, so it is the same in either direction.
Example numbers — estimates for electricity demand vary by study. This tool only works the formula between two points.
Quantity changes less than the price.
| Change in quantity | -10.5% | (45 − 50) ÷ 47.5 |
|---|---|---|
| Change in price | +18.2% | (120 − 100) ÷ 110 |
| |E| | 0.58 | |-10.5% ÷ 18.2%| |
| Price × quantity | 5,000 → 5,400 | up |
Not in this calculation
- How the response changes over time — short run and long run
- Changes in income or in other prices
- Elasticity at a single point — that needs the shape of the curve
- Actual elasticities of electricity demand — the defaults are example numbers
| 0 | Perfectly inelastic | Quantity does not change when the price does. |
|---|---|---|
| 0 ~ 1 | Inelastic | Quantity changes less than the price. |
| 1 | Unit elastic | Quantity changes in the same proportion as the price. |
| > 1 | Elastic | Quantity changes more than the price. |
| ∞ | Perfectly elastic | Quantity changed while the price stayed the same. |
Using the example values
With real numbers
Indicator →The highest- and lowest-demand days The days with the highest and lowest peak demand between 28 Aug and 1 Oct 2026 (35 days)
| Day | Peak demand MW | Time | Reserve margin % | Mainland SMP, day’s high KRW/kWh | Mainland SMP, weighted average KRW/kWh |
|---|---|---|---|---|---|
| 2026-08-28 | 90,536 | 15:00 | 18.4 | 177.29 | 155.78 |
| 2026-09-25 | 55,706 | 20:00 | 65.4 | 111.43 | 94.2 |
The SMP was higher on the high-demand day. But this table only sets two days side by side; it does not show how much demand raised the price. The SMP also moves with fuel costs, plant availability and renewable output.
Source: Peak demand and reserve: KPX EPSIS daily supply and demand · SMP: KPX daily SMP (mainland) · retrieved 2026-10-01
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