Total revenue will rise.
The type of demand that exists when a percent change in price causes an equal (but of opposite sign) percent change in quantity demanded. 28 If total revenue does not change when price increases, the demand curve is unitary elastic, value equals -1. 36 Price elasticity of demand is the percentage change in quantity demanded divided by the percentage change in price How do I measure the price elasticity of demand for a good? And if the price goes down, the quantity demanded goes up. But what the Law of Demand does not tell us is how much the quantity demanded changes when the price changes. The Law of Demand tells us the direction in which quantity demanded will change, but it does not tell us the magnitude of that change. If price goes up and quantity remains unchanged, total revenue will rise. But the second effect is that quantity in fact will not remain unchanged. When price goes up, the quantity demanded (and therefore the quantity sold) goes down. And by itself, the lower quantity causes total revenue to go down. If demand is elastic, we know that the increase in price will cause quantity demanded to fall by a lot. When price goes up, quantity demanded goes down, by a lot. To be precise, when demand is elastic, the percentage change in quantity demanded is greater than the percentage change in price. If price goes up and quantity remains unchanged, total revenue will rise. But the second effect is that quantity in fact will not remain unchanged. When price goes up, the quantity demanded (and therefore the quantity sold) goes down. And by itself, the lower quantity causes total revenue to go down. If demand is inelastic, we know that the increase in price will cause quantity demanded to fall just a little. When price goes up, quantity demanded goes down, but not by much. To be precise, when demand is inelastic, the percentage change in quantity demanded is smaller than the percentage change in price. If price goes up and quantity remains unchanged, total revenue will rise. But the second effect is that quantity in fact will not remain unchanged. When price goes up, the quantity demanded (and therefore the quantity sold) goes down. And by itself, the lower quantity causes total revenue to go down. In economics, the Total Revenue Test is a means for determining whether demand is elastic or inelastic. If an increase in price causes an increase in total revenue, then demand can be said to be inelastic, since the increase in price does not have a large impact on quantity demanded. If demand is elastic, , then: price and total revenue move in opposite directions. If demand is inelastic, , then: price and total revenue change in the same direction. If demand is unit elastic, , then: an increase in price has no influence on the total revenue. • So quantity sold at $1.10 will be 900 and total revenue will beTotal revenue = $1. 10 × 900 = $990 ≈ $1000 5 More generally ...• If demand for a good is elastic (the price elasticity of demand is greaterthan 1), an increase in price reduces total revenue. In this case, theprice eﬀect is weaker than the quantity eﬀect. • If demand for a good is inelastic (the price elasticity of demand is lessthan 1), an increase in price increases total revenue. In this case, theprice eﬀect is stronger than the quantity eﬀect If demand is elastic then the total revenue with the price incereases. As demand changes according to price of a commodity. Demand varies with respect to the variation in the prices of a commodity. Demand increases with the decrease in price and demand decreases with the increase in the prices of the commodities. And total revnue is the amount of sale of any commodity. So, the decrease in price causes the total revenue to incerase. -price per unit increases As quantity goes up, what happens to price? -price per unit decreases Example Define the demand function to be D(q) = aq2 + bq + c, where a = 0.0000018, b = 0.0002953, and c = 30.19.  Unitary elasticity occurs when the quantity of a product demanded changes in response to price changes in a way that leaves total revenue the same. Elasticity occurs when a reduction in price increases the quantity demanded so that the seller's revenue increases. However, when a price reduction increases both the quantity demanded and revenue, it is, by definition, a case of elasticity of demand. The elasticity of demand chart also demonstrates that, with elasticity, a price increase will decrease demand to the point where revenue also decreases. Remember that total revenue is equal to price times quantity. If price goes up and quantity remains unchanged, total revenue will rise. But the second effect is that quantity in fact will not remain unchanged. When price goes up, the quantity demanded (and therefore the quantity sold) goes down. And by itself, the lower quantity causes total revenue to go down.
http://www.nr.edu/eco202/pps/m05.pdf http://pholleran.asp.radford.edu/505_fall06_notes_week03_elasticity.html http://pholleran.asp.radford.edu/505_fall06_notes_week03_elasticity.html http://pholleran.asp.radford.edu/505_fall06_notes_week03_elasticity.html https://en.wikipedia.org/wiki/Total_revenue_test http://www.econ.yale.edu/~gjh9/econ115b/slides3_5_4perpage.pdf https://answers.yahoo.com/question/index?qid=20090825190145AAr3gPc http://math.arizona.edu/%7Ekerimar/Demand,%20Revenue,%20Cost,%20&%20Profit.ppt http://www.infoplease.com/cig/economics/let-stretch-elasticity-demand.html http://pholleran.asp.radford.edu/505_fall06_notes_week03_elasticity.html
if quantity demanded goes down what happens to total revenue