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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.