ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -If an increase in price causes a decrease in total revenue, then demand can be said to be elastic, since the increase in price has a large impact on quantity demanded. Different commodities may have different elasticities depending on whether people need them (necessities) or want them (accessories).

Detailed explanation-2: -In the elastic region, the percentage change in quantity demanded is greater than the percentage change in price, so raising the price in this region of the demand curve will decrease total revenue while lowering the price increases total revenue.

Detailed explanation-3: -Demand is unit price elastic, and total revenue remains unchanged. Quantity demanded falls by the same percentage by which price increases.

Detailed explanation-4: -The changes in total revenue are based on the price elasticity of demand, and there are general rules for them: Price and total revenue have a positive relationship when demand is inelastic (price elasticity < 1), which means that when price increases, total revenue will increase too.

Detailed explanation-5: -If demand for a product is price elastic and the price increases, total revenue will decrease. If demand for a product is price inelastic and the price decreases, total revenue will decrease.