If a price increase leads to a decrease in total revenue, what can we infer about the elasticity of demand for that product?

When a price increase causes total revenue to decrease, it indicates that the demand for that product is elastic. This means that consumers are sensitive to price changes; when the price goes up, they buy significantly less of the product. For example, if the price of a popular snack raises from $1 to $2, and many customers stop buying it altogether, the company's total revenue will drop because fewer people are purchasing the snack. In this case, the percentage drop in quantity demanded is greater than the percentage increase in price. Thus, we can conclude that consumers are likely to find alternatives or forego the product when its price rises, reflecting elastic demand.