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Elastic-Demand Price Markup

Apply the constant-elasticity markup rule and midpoint demand comparisons to two observations.

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Calculator inputs

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How to use this calculator

  1. Enter the known values in the units shown. Results update as you type.
  2. Where results are editable, change one to solve backwards. Lock a value to hold it fixed.
  3. Use the worked example to check the method. Reset restores the starting fields.

Use the result with context

Results are estimates for planning and education. Confirm rates, taxes, fees, and legal requirements with the relevant institution or a qualified professional before making a financial decision.

Formula and method

Marginal cost 10 and elasticity −2 imply a markup price of 20. The midpoint approximation from price 30 and quantity 100 implies quantity about 233.33.

Markup price = marginal cost × elasticity / (elasticity + 1), for elasticity < −1.

Worked example

Enter these known values and leave the other values blank.

Marginal costs
10 USD
Price elasticity of demand
-2
Final price
30 USD
Final quantity
100
Marginal revenue
10 USD
Elasticity markup price
20 USD
Midpoint-implied quantity
233
Profit at final price
2000 USD
Contribution at implied point
2333.33 USD

Assumptions and limitations

  • The price rule assumes constant marginal cost and a demand elasticity less than minus one. It excludes taxes and fixed costs.
  • The displayed quantity uses midpoint elasticity algebra between the entered final point and the markup point. It is an approximation, not an exact constant-elasticity demand forecast or proof of a global profit maximum.
  • Enter all money amounts in one currency. The retained currency conversion menu uses captured historical conversion factors, not current exchange quotes.
  • Clear an unknown editable field before solving an inverse; fixed selections and output-only fields cannot be inferred.

Common questions

What does this calculation assume?

The price rule assumes constant marginal cost and a demand elasticity less than minus one. It excludes taxes and fixed costs.

Are these current exchange rates?

No. Use one currency consistently; currency menu factors are a historical snapshot.

References

Normalize captured comparison syntax without changing its mathematical truth conditions.

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