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You will note that when price changes from $5 per unit to $6, total outlays remain the same.
This indicates the good has unitary elasticity (an elasticity of 1.00).
But, you notice that the percentage decrease in quantity demanded is not equal to the
percentage increase in price. Confirm this yourself : price has risen from $5 to $6 :
(a 20% rise) and quantity demanded has fallen from 600 to 500 units : a 17% fall.
What's happening here? The differences in percentage change highlight that the
total outlays method is only an approximate measure of elasticity.
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