The correct answer is: All of these.
The total outlay method, the arc method, and the point method are all techniques of measuring elasticity of demand.
The total outlay method measures elasticity of demand by calculating the total amount of money spent on a good by consumers as the price of the good changes. The arc method measures elasticity of demand by calculating the average price and average quantity demanded of a good over a range of prices. The point method measures elasticity of demand by calculating the elasticity of demand at a single point on the demand curve.
Each of these methods has its own advantages and disadvantages. The total outlay method is the simplest to calculate, but it is not very accurate. The arc method is more accurate than the total outlay method, but it is more difficult to calculate. The point method is the most accurate method, but it is also the most difficult to calculate.
The choice of which method to use depends on the specific situation. If accuracy is not important, then the total outlay method may be the best choice. If accuracy is important, then the arc method or the point method may be the best choice.
Here is a more detailed explanation of each method:
Total outlay method
The total outlay method measures elasticity of demand by calculating the total amount of money spent on a good by consumers as the price of the good changes. The total outlay is calculated as follows:
$Total\ outlay = P \times Q$
where $P$ is the price of the good and $Q$ is the quantity demanded of the good.
The elasticity of demand is then calculated as follows:
$E_d = \frac{\frac{dQ}{dP}}{Q}$
where $E_d$ is the elasticity of demand, $\frac{dQ}{dP}$ is the change in quantity demanded divided by the change in price, and $Q$ is the quantity demanded.
The total outlay method is the simplest to calculate, but it is not very accurate. This is because the total outlay is affected by both the price of the good and the quantity demanded of the good. If the price of the good changes, but the quantity demanded of the good does not change, then the total outlay will change. This means that the total outlay method can give misleading results if the quantity demanded of the good is not constant.
Arc method
The arc method measures elasticity of demand by calculating the average price and average quantity demanded of a good over a range of prices. The average price is calculated as follows:
$\bar{P} = \frac{P_1 + P_2}{2}$
where $P_1$ is the first price and $P_2$ is the second price.
The average quantity demanded is calculated as follows:
$\bar{Q} = \frac{Q_1 + Q_2}{2}$
where $Q_1$ is the first quantity demanded and $Q_2$ is the second quantity demanded.
The elasticity of demand is then calculated as follows:
$E_d = \frac{\frac{Q_2 – Q_1}{\bar{Q}}}{\frac{P_2 – P_1}{\bar{P}}}$
where $E_d$ is the elasticity of demand, $\frac{Q_2 – Q_1}{\bar{Q}}$ is the change in quantity demanded divided by the average quantity demanded, and $\frac{P_2 – P_1}{\bar{P}}$ is the change in price divided by the average price.
The arc method is more accurate than the total outlay method, but it is more difficult to calculate. This is because the arc method requires calculating the average price and average quantity demanded.
Point method
The point method measures elasticity of demand by calculating the elasticity of demand at a single point on the demand curve. The elasticity of demand at a single point is calculated as follows:
$E_d = \frac{\frac{dQ}{dP}}{Q}$
where $E_d$ is the elasticity of demand, $\frac{dQ}{dP}$ is the change in quantity demanded divided by the change in price, and $Q$ is the quantity demanded.
The point method is the most accurate method, but it is also the most difficult to calculate. This is because the point method requires calculating the change in quantity demanded and the change in price at a single point on the demand curve.