From the previous section we know that if the price rises by 10% and the quantity demanded falls by 15% the elasticity is 1.5.  But how do we measure the percentage change?  There are two different ways to measure the percentage change, the first depends upon knowing the original price and quantity, the second does not.  For simplicity purposes we will begin with the first method.

If we know the original point of the changes in price and quantity we need only substitute a percentage calculation into our elasticity formula.  The percentage formula is the change in the variable divided by the original value of the variable multiplied by 100.  Mathematically;
X2 - X1  * 100 = %DX
    X1
By replacing X with the appropriate variable we obtain the elasticity formula.
Q2 - Q1  * 100 = %DQ
     Q1
P2 - P1  * 100  = %DP
    P1
Insert the computed values into our formula, and you have the price elasticity of demand.

Example:  A bookstore is currently selling 400 copies of a science fiction novel a week at a price of $15.  If the price were to rise to $18  the bookstore would only sell 375 copies.  What is the price elasticity of demand?
Q1 = 400, Q2 = 375
375 - 400  * 100 = -6.25%
    400

P1 = 15, P2 = 18
18 - 15  * 100 = 20%
    15

Recall that we use only positive percentages for price elasticity of demand.
%DQ  =  -6.25%  =  .3125
%DP         20%

This tells us that at a price of $15 a 1% increase in price results in a 0.3125% decrease in the quantity demanded of the science fiction novel.  Since the value of the elasticity is less than one, demand is inelastic.