Q.A shopkeeper finds that when he charges ₹50 per unit he sells 200 units (total sales value ₹10,000), and when he lowers the price to ₹40 he sells 260 units (total sales value ₹10,400). Using the total-outlay method, state the nature of demand, and verify with the percentage method.

The total-outlay method judges elasticity from the direction of total expenditure (price × quantity) when price changes. …

Total-outlay reasoning. Total expenditure (= seller's total revenue) was ₹10,000 at ₹50 and became ₹10,400 at ₹40. Price fell and total expenditure rose — by the total-outlay rule this signals elastic demand ($E_p>1$). The price cut more than paid for itself through higher volume.

Verification by the percentage method. Base $P = ₹50$, $Q = 200$; $\Delta Q = 260-200 = +60$; $\Delta P = 40-50 = -₹10$.

Numerical value $E_p = 1.5 > 1$, which agrees with the total-outlay verdict. …

Direct percentages: $\%\Delta Q = (60/200)\times100 = 30\%$; $%\Delta P = (10/50)\t …

Confusing total sales value (P×Q) with quantity; concluding inelastic because 'sales rose only a little'; forgetting that the total-outlay rule for a …