If price changes and total revenue changes in the opposite direction, we can conclude that demand is relatively elastic.

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Quizplus · Accepted Answer

This is because when demand is relatively elastic, consumers are very responsive to changes in price, and therefore a small change in price results in a larger change in quantity demanded. As a result, if the price increases and total revenue decreases, it means that demand has decreased by more than the increase in price, indicating relatively elastic demand. Conversely, if the price decreases and total revenue increases, it would suggest relatively inelastic demand.

If Price Changes and Total Revenue Changes in the Opposite