What is the total revenue test? The total revenue test is a method of estimating the price elasticity of demand by observing the __ that results from __ when all other influences on the quantity sold remain the same. A. change in total revenue; a change in the price B. change in the quantity demanded; a change in the price C. total revenue; the quantity sold at a given price D. change in the quantity sold; a change in demand

## Step 1<br />The total revenue test is a method used to estimate the price elasticity of demand. This test involves observing the change in total revenue that results from a change in the price, assuming all other factors influencing the quantity sold remain constant.<br /><br />## Step 2<br />The total revenue is calculated by multiplying the price of the product by the quantity sold. If the total revenue increases as the price increases, the demand is considered inelastic. This is because the percentage change in quantity is less than the percentage change in price.<br /><br />## Step 3<br />On the other hand, if the total revenue decreases as the price increases, the demand is considered elastic. This is because the percentage change in quantity is greater than the percentage change in price.<br /><br />## Step 4<br />The total revenue test is a useful tool for businesses to understand the elasticity of their demand. It helps them make informed decisions about pricing and production.