Price Elasticity -- Demand (excel)

[crf1722]

I cannot figure out how to calculate price elasticity????

Base Price = $4.00
Demand At this Price = 5,000

For every $ .05 price increase
There is a 1,000 demand decrease
For every $.05 price decrease
There is a 1,000 demand increase

I have tried (but instead of numbers I used cell references)

=(1,000/5,000) / (.05/4.00)

This should equal the elasticity right???
I get 1.6 on calculator, but 16 in excel even when trying in different workbook???

Any help appreciated!!!

[shg]

The 16 (which should be -16) tells you that demand decreases 16 times faster than price increases.

[watersev]

hi, correct answer is 16, on calculator you probably infringe rules of priority of actions.
So finally we need to divide 1/5 by 1/8, result will always be 16

[crf1722]

Oh , okay.... So how exactly would I put that into an equation to solve it???