Question

give me the formula of total outlay in economics. ​

Answer 1

Answer:

Total Outlay Method = total expenditure method  by Professor Alfred Marshall

Explanation:

Used to know Sum of total cost and opportunity cost.

When we compare the expenditure, we may get one of three outcomes:

• Elasticity of demand will be greater than unity (Ep > 1)
• Elasticity of demand will be equal to unity (Ep = 1)
• Elasticity of demand will be less than unity (Ep < 1)

Outcome of these result plotted on a graph where total outlay or expenditure is measured on the X-axis while price is measured on the Y-axis.

Movement of values in graph shows the variation in expenses.

Limitation of this method: It does not provide us exact numerical measurement of elasticity of demand but only indicates if the demand is elastic, inelastic or unitary in nature.