Price elasticity calculation, with no known curve

Avit

Board Regular
Joined
Jan 9, 2013
Messages
85
Platform
  1. MacOS
Hi,
Assume, I have a product priced at $50 which sells a quantity of 1,000
I am given that the price elasticity of demand is (-0.5), however - I don't have more data (no curve or other data points)
I am trying to figure out the formula that would tell me how much is my quantity for a new price point (e.g. $30 or $80) - and would it work also for a positive elasticity number (e.g. 1.2)
Thanks

For reference the elasticity formula is : where Q1 and P1 are the new quantity and price, and Q0, P0 are the old quantity and price.

Thanks!!
1697843227266.png
 

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Simple Goal seek using the formula and information you shared - Check Cell B5

Screenshot 2023-10-21 at 07.32.26.png


Book1
AB
1P050
2Q01,000
3P130
4Q11,025
5e(0.05)
Sheet1
Cell Formulas
RangeFormula
B5B5=((B4-B2)/(B4+B2))/((B3-B1)/(B3+B1))
 
Upvote 0
Hi Thanks, and yes, I know I can do it with goalseek. That's the first thing I did.
The problem is I need it on a column (multiple calculations) and I need it to be changed automatically (because I am applying this to multiple calculations with different elasticity curves).
think of it as 20 pricing tiers, and for each one, I decided there's a different elasticity (e.g., for rich people , for poor people , for people in new york, for people in brussles, etc.)
Any other idea?
Thanks of course
 
Upvote 0
)]vide the Excel formula because that'e easy when you know the math, but
Q1 = [-Q0*((P1+P0)+ELASTICITY*(P1-P0)] / [ELASTICITY*(P1-P0) - (P1+P0)]
 
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