Measures of Price Elasticity of Demand

There are four methods of measuring elasticity of demand. These are:- Total outlay or expenditure method; Point methods often referred to as the geometrical method; Arc method, and Mathematical method Total Outlay Method: One method of measuring price elasticity of demand, according to Marshall is to consider the change in the price and the consequent […]

Point Method – Measures of price elasticity of demand

Point method is used when the demand curve is a straight line. In this method we measure elasticity at a particular point on the demand curve. This method has now become the most common method of measuring elasticity of demand. We draw a demand curve DD and draw line AB tangent to the demand curve […]