A dentist was Charging ₹ 300 for a standard cleaning job and it used to generate total revenue equal to ₹ 30,000 per month. She has , since las month , increased the price of dental cleaning to ₹ 350. As a result, fewer customers are now coming for dental cleaning, but the total revenue is now ₹ 33,250 .from this, what can we conclude about the elasticity of demand for her dental service ?

Answer

`E_(d)= (-) 0.3` ( Demand is less elastic as `E_(d) lt 1`)
Negaative sign of `E_(d)` indicates relationship between price and quantity demanded.

Explanation

Total Expenditure Method
With increase in fees, the total revenue of dentist has also increased. Hence, the elasticity of demand for her dental service is less than one.
Proportionate Method

price Elasticity of Demand `(E_(d))= (DeltaQ)/(DeltaP)xx P/Q = (-5)/50 xx 300/100 = (-) 0.3`