A simple method of measuring the price elasticity of demand is the total outlays method. This method is only an approximate method of determining elasticity. The most accurate method is the arc method of elasticity, which will be outlined later in this section.

The ''total outlays'' method has two steps.

The first is to prepare a total outlay or total revenue table for the good or service under investigation. The second step is to look at the change in total revenue received and compare it with the direction of the price change that caused the change in total revenue.