Which of the following will result in an increase in total revenue? a. Price increases when demand is elastic. b. Price decreases when demand is elastic. c. Price increases when demand is unitary elastic. d. Price decreases when demand is inelastic.

Price elasticity of demand is a measure of the sensitivity of quantity demanded to changes in price. It can be calculated using the formula: \[Price\:Elasticity\:of\:Demand = \frac{% \%\:Change\:in\:Quantity\:Demanded}{\%\:Change\:in\:Price}\] 1. Elastic demand: If the absolute price elasticity of demand is greater than 1, the demand is elastic, meaning that the quantity demanded is more sensitive to changes in price. In this case, an increase in price will result in a decrease in the total revenue, while a decrease in price will result in an increase in the total revenue. 2. Inelastic demand: If the absolute price elasticity of demand is less than 1, the demand is inelastic, meaning that the quantity demanded is less sensitive to changes in price. In this case, an increase in price will result in an increase in the total revenue, while a decrease in price will result in a decrease in the total revenue. 3. Unitary elastic demand: If the absolute price elasticity of demand is equal to 1, the demand is unitary elastic, meaning that the quantity demanded is equally sensitive to changes in price. In this case, the total revenue remains constant when the price changes.

a. Price increases when demand is elastic. In elastic demand, an increase in price leads to a more significant decrease in quantity demanded, which results in a decrease in the total revenue. b. Price decreases when demand is elastic. In elastic demand, a decrease in price leads to a more significant increase in quantity demanded, which results in an increase in the total revenue. c. Price increases when demand is unitary elastic. In unitary elastic demand, any change in price will not affect total revenue because the percentage change in quantity demanded is equal to the percentage change in price. d. Price decreases when demand is inelastic. In inelastic demand, a decrease in price results in a smaller increase in quantity demanded, which results in a decrease in the total revenue.

From the analysis of each scenario, we can conclude that the scenario which results in an increase in total revenue is "b. Price decreases when demand is elastic."