If a firm experiences an increase in total revenue when it raises its prices, it can be concluded that the demand for its product is elastic.

If a firm raises its prices and sees an increase in total revenue, it suggests that the demand for its product is inelastic, not elastic. Inelastic demand means that customers are not very sensitive to price changes; they will still buy the product even if the price goes up. For example, if a company that sells a popular medication raises its price, people may continue to buy it because they need it, leading to higher total revenue. On the other hand, if demand were elastic, raising prices would cause total revenue to fall because customers would buy less. Therefore, an increase in total revenue when prices rise indicates that demand is inelastic.