Calculator inputs
Formula used
Q = A - bP
Q is quantity demanded, P is price, A is the adjusted intercept, and b is the positive demand slope coefficient.
A = a + s
a is the original intercept and s is the shift adjustment entered in the form.
b = (Q1 - Q2) / (P2 - P1)
a = Q1 + bP1
This estimates the straight-line demand function from two observed price-quantity combinations.
P = (A - Q) / b
Inverse demand expresses the price implied by any target quantity on the same linear curve.
Ed = (dQ/dP) × (P/Q) = -b × (P/Q)
Elasticity shows how sensitive quantity is to a small price change at the selected point.
TR = P × Q
P* = A / (2b), Q* = A / 2
For a linear demand curve, revenue reaches its maximum when elasticity equals minus one.
How to use this calculator
- Choose whether you want to enter direct coefficients or estimate the curve from two observations.
- Provide the demand inputs, a shift adjustment if needed, and the price range for the demand schedule.
- Enter a selected price to evaluate quantity demanded, elasticity, and total revenue at one specific point.
- Press Calculate Demand Curve to display results above the form, directly under the header area.
- Review the schedule table, plot, and key metrics, then export the output through the CSV or PDF buttons.
Example data table
Example assumption: Q = 120 - 2P with prices from 0 to 40 in steps of 10.
| Price | Quantity Demanded | Total Revenue |
|---|---|---|
| 0 | 120 | 0 |
| 10 | 100 | 1000 |
| 20 | 80 | 1600 |
| 30 | 60 | 1800 |
| 40 | 40 | 1600 |
FAQs
1. What does this demand curve calculator compute?
It builds a linear demand curve, generates a schedule, estimates elasticity at a chosen price, shows inverse demand, total revenue, choke price, and the revenue-maximizing point.
2. Can I create the curve from market observations?
Yes. Choose the two-observation method, enter two price-quantity pairs, and the calculator estimates the linear demand equation before plotting the curve.
3. Why can theoretical quantity become negative?
A straight-line model can extend past realistic market behavior. The graph may show that theoretical line, while practical sales outputs treat quantity below zero as zero.
4. What is choke price?
Choke price is the price where predicted quantity demanded becomes zero. Above that price, the model implies buyers stop purchasing the product.
5. What does elasticity mean in this tool?
Point elasticity measures how responsive quantity is to a small price change at the selected price. Larger absolute values mean demand is more sensitive.
6. Why does revenue peak halfway on a straight demand curve?
For a linear demand curve, total revenue peaks where elasticity equals minus one. That occurs at half the intercept quantity and half the choke price.
7. Can I export the generated output?
Yes. Use the CSV button for spreadsheet-friendly data and the PDF button for a formatted summary, key metrics, and the generated schedule.
8. Is this calculator suitable for every product?
It works well for teaching, quick linear approximations, and scenario testing. Complex markets may need nonlinear demand models, segmentation, or econometric estimation.