If the price of a luxury good increases and total revenue also increases, this indicates that the demand for that good is __________.

If the price of a luxury good increases and total revenue also increases, this indicates that the demand for that good is inelastic. Inelastic demand means that consumers are not very sensitive to price changes; they will continue to buy the good even if the price goes up because they see it as a necessity or a highly desirable item. For example, if a designer handbag becomes more expensive but people still buy it at the new price, it shows they value it so much that they are willing to pay more. This behavior leads to higher total revenue for the seller, as the increase in price outweighs any potential loss in sales volume. Therefore, inelastic demand is characterized by consumers' willingness to pay higher prices without significantly reducing their purchases.