Pricing Elasticity Estimator — Model Demand Sensitivity and Revenue Curves
Model demand sensitivity to price changes and estimate revenue impact of pricing adjustments
How to Use Pricing Elasticity Estimator — Model Demand Sensitivity and Revenue Curves
How to Use the Pricing Elasticity Estimator
Step 1: Enter Your Current Pricing
Enter your Current Price (e.g. monthly subscription price) and Current Customers (the number of paying customers at that price).
Step 2: Enter Your Elasticity Coefficient
The elasticity coefficient is the absolute percentage change in demand for every 1% change in price:
- Below 1.0 — demand is inelastic (customers are relatively insensitive to price)
- Around 1.0 — demand is unit elastic (demand moves proportionally with price)
- Above 1.0 — demand is elastic (customers are highly sensitive to price)
If you don't know your exact elasticity, use a preset or estimate it from past pricing changes: % change in customers ÷ % change in price.
Step 3: Enter a Test Price Change
Enter a Test Price Change percentage (e.g. +10% or -15%) to see the projected new price, customer count, and revenue for that specific scenario.
Step 4: Review the Demand Curve Table
The table shows projected customers and revenue across a range of price changes from -30% to +30%, with the revenue-maximizing scenario highlighted as "Best".
Step 5: Read the Recommendation
Based on your elasticity classification, the tool recommends whether raising or lowering price is likely to increase total revenue.
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