Price elasticity compares the percentage change in demand with the percentage change in price. A larger absolute value means demand is more sensitive.
On the demo's illustrative demand curve, raising price lowers quantity, but revenue need not move in the same direction. The balance depends on elasticity.
Control for time, competitor prices and promotions before attributing a change to price. Demo figures are illustrative.
When to use
Use before a price increase or discount to examine units, revenue and profit together.