.price-elasticity-calculator-container {
font-family: 'Segoe UI', Tahoma, Geneva, Verdana, sans-serif;
max-width: 700px;
margin: 20px auto;
padding: 25px;
border: 1px solid #e0e0e0;
border-radius: 10px;
background-color: #f9f9f9;
box-shadow: 0 4px 12px rgba(0, 0, 0, 0.08);
}
.price-elasticity-calculator-container h2 {
color: #333;
text-align: center;
margin-bottom: 25px;
font-size: 28px;
}
.price-elasticity-calculator-container .input-group {
margin-bottom: 18px;
display: flex;
flex-direction: column;
}
.price-elasticity-calculator-container label {
margin-bottom: 8px;
color: #555;
font-weight: bold;
font-size: 15px;
}
.price-elasticity-calculator-container input[type="number"] {
width: calc(100% – 20px);
padding: 12px;
border: 1px solid #ccc;
border-radius: 6px;
font-size: 16px;
box-sizing: border-box;
transition: border-color 0.3s ease;
}
.price-elasticity-calculator-container input[type="number"]:focus {
border-color: #007bff;
outline: none;
box-shadow: 0 0 5px rgba(0, 123, 255, 0.3);
}
.price-elasticity-calculator-container button {
display: block;
width: 100%;
padding: 14px 20px;
margin-top: 25px;
background-color: #007bff;
color: white;
border: none;
border-radius: 6px;
font-size: 18px;
cursor: pointer;
transition: background-color 0.3s ease, transform 0.2s ease;
box-shadow: 0 4px 8px rgba(0, 123, 255, 0.2);
}
.price-elasticity-calculator-container button:hover {
background-color: #0056b3;
transform: translateY(-2px);
}
.price-elasticity-calculator-container button:active {
transform: translateY(0);
box-shadow: 0 2px 4px rgba(0, 123, 255, 0.3);
}
.price-elasticity-calculator-container .result {
margin-top: 30px;
padding: 20px;
border: 1px solid #d4edda;
background-color: #e9f7ef;
border-radius: 8px;
font-size: 18px;
color: #155724;
text-align: center;
line-height: 1.6;
box-shadow: 0 2px 8px rgba(0, 0, 0, 0.05);
}
.price-elasticity-calculator-container .result strong {
color: #0a3622;
font-size: 20px;
}
.price-elasticity-calculator-container .error {
color: #dc3545;
background-color: #f8d7da;
border: 1px solid #f5c6cb;
padding: 10px;
margin-top: 20px;
border-radius: 6px;
text-align: center;
}
.price-elasticity-calculator-container h3 {
color: #333;
margin-top: 40px;
margin-bottom: 15px;
font-size: 24px;
border-bottom: 2px solid #eee;
padding-bottom: 10px;
}
.price-elasticity-calculator-container p {
color: #444;
line-height: 1.7;
margin-bottom: 15px;
font-size: 16px;
}
.price-elasticity-calculator-container ul {
list-style-type: disc;
margin-left: 20px;
margin-bottom: 15px;
color: #444;
}
.price-elasticity-calculator-container ul li {
margin-bottom: 8px;
line-height: 1.6;
font-size: 16px;
}
function calculatePED() {
var originalPrice = parseFloat(document.getElementById('originalPrice').value);
var newPrice = parseFloat(document.getElementById('newPrice').value);
var originalQuantity = parseFloat(document.getElementById('originalQuantity').value);
var newQuantity = parseFloat(document.getElementById('newQuantity').value);
var resultDiv = document.getElementById('pedResult');
if (isNaN(originalPrice) || isNaN(newPrice) || isNaN(originalQuantity) || isNaN(newQuantity) ||
originalPrice <= 0 || newPrice <= 0 || originalQuantity <= 0 || newQuantity 1) {
interpretation = 'Elastic (Quantity demanded changes proportionally more than price)';
} else if (absolutePed < 1) {
interpretation = 'Inelastic (Quantity demanded changes proportionally less than price)';
} else {
interpretation = 'Unitary Elastic (Quantity demanded changes proportionally the same as price)';
}
resultDiv.className = 'result';
resultDiv.innerHTML = 'Price Elasticity of Demand (PED): ' + ped.toFixed(3) + " +
'Absolute PED: ' + absolutePed.toFixed(3) + " +
'Interpretation: ' + interpretation;
resultDiv.style.display = 'block';
}
Price Elasticity of Demand Calculator
Understanding Price Elasticity of Demand
Price Elasticity of Demand (PED) is a fundamental concept in economics that measures the responsiveness of the quantity demanded for a good or service to a change in its price. It helps businesses and policymakers understand how consumers will react to price adjustments.
The formula for Price Elasticity of Demand is:
PED = (% Change in Quantity Demanded) / (% Change in Price)
For more accurate calculations, especially when dealing with larger price changes, economists often use the midpoint formula for percentage change:
% Change = ((New Value – Old Value) / ((Old Value + New Value) / 2)) * 100
Interpreting the PED Value:
- Elastic Demand (PED > 1): When the absolute value of PED is greater than 1, it means that the quantity demanded changes by a larger percentage than the change in price. Consumers are highly responsive to price changes. Products with many substitutes or luxury goods often have elastic demand.
Example: If the price of a specific brand of smartphone increases by 10%, and its sales drop by 20%, the demand is elastic. - Inelastic Demand (PED < 1): When the absolute value of PED is less than 1, it means that the quantity demanded changes by a smaller percentage than the change in price. Consumers are not very responsive to price changes. Necessities or products with few substitutes typically have inelastic demand.
Example: If the price of essential medicine increases by 10%, and the quantity demanded only drops by 2%, the demand is inelastic. - Unitary Elastic Demand (PED = 1): When the absolute value of PED is exactly 1, it means that the quantity demanded changes by the same percentage as the change in price.
Example: If the price of a product increases by 10%, and the quantity demanded also decreases by 10%, the demand is unitary elastic. - Perfectly Elastic Demand (PED = ∞): Consumers will only buy at one price, and any price increase will cause demand to fall to zero. This is theoretical and rare in reality.
- Perfectly Inelastic Demand (PED = 0): The quantity demanded does not change at all, regardless of the price change. This is also theoretical, but some life-saving drugs come close.
Why is PED Important?
- For Businesses: Understanding PED helps businesses make informed decisions about pricing strategies. If demand is elastic, a price increase could lead to a significant drop in revenue, while a price decrease might boost total revenue. If demand is inelastic, a price increase could increase total revenue.
- For Governments: Governments use PED to predict the impact of taxes (which increase prices) on consumption. For example, taxing goods with inelastic demand (like tobacco or gasoline) can generate substantial revenue without drastically reducing consumption.
- For Consumers: While not directly calculating PED, consumers benefit from competitive pricing strategies driven by businesses' understanding of elasticity.
By using the calculator above, you can quickly determine the price elasticity of demand for a product based on changes in its price and the corresponding changes in quantity demanded.