Price Elasticity Excel Template

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Let’s take a simple example to understand the same, suppose that the price of oranges will
fall by 6% say from $3.49 a bushel to $3.29 a bushel. Responding to that, the grocery shoppers
will increase their oranges purchases by 15%. What is its price elasticity?

Price Change (P*) 6%

Quantity Change (Q*) 15%

Price Elasticity of Demand for Oranges is calculated using the formula given below
Price Elasticity of Demand = % Change in the Quantity Demanded (ΔQ) / % Change in the Price (ΔP)

Price Elasticity of Demand 2.6

According to data available, when one would go from nil surge to a 1.2x surge,
one would notice a consistently precise a drop-in demand for about 27%.
So, what is the price elasticity of uber surge pricing?

% Change in the Quantity Demanded (Q*) 27%

% Change in the Price (P*) 20%

Price Elasticity of Demand is calculated using the formula given below

Price Elasticity of Demand = % Change in the Quantity Demanded (ΔQ) / % Change in the Price (ΔP)

Price Elasticity of Demand 1.35

Taking another example of mobile industry in India, say JIO which launched its network at very cheap data rates
where it provided a plan of 399 where consumers will get 1 GB of data daily until 80 days period and along with
free calling and roaming whereas the market was offering 1 GB of data at a price of 249 for 1gb which only lasted
a month. Reliance Jio had launched its mobile services commercially in early September 5 in 2016 and the service
provider crossed 130 million mark in 1 year of its operations and further at the end of March 2018, Jio (RIL)
reported a subscriber base of 187 million which means, the company or the firm added close to 9 million
users in the months of April, May, and June.

Price of 80 days pack for 1 GB daily (P) 399

Price of 30 days pack for 1 GB monthly (P1) 249
New Price of 1 GB =(P)/80 4.99
launch Month Subscribers (in Mil) 130.00
March ended Subscribers (in Mil) 187.00

% Change in the Price is calculated as:

% Change in the Price (P*) 98%

% Change in the Quantity Demanded is calculated as:

% Change in the Quantity Demanded (Q*) 43.85%

Price Elasticity of Demand is calculated using the formula given below

Price Elasticity of Demand = % Change in the Quantity Demanded (ΔQ) / % Change in the Price (ΔP)

Price Elasticity of Demand 0.45

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