If a company increases the price of a product and observes an increase in total revenue, it can be concluded that demand for the product is perfectly inelastic.

When a company raises the price of a product and sees its total revenue go up, it suggests that customers are still buying the product despite the higher cost. This situation often happens when the demand for the product is perfectly inelastic, meaning that people will buy the same amount no matter how much the price changes. For example, think about life-saving medication that people need no matter what the price is; even if the company raises the price, patients will still purchase it because they cannot do without it. This shows that the demand doesn't change with price increases, leading to higher total revenue for the company. Therefore, if total revenue increases with a price hike, it often indicates that demand is not sensitive to price changes.