When studying changes in supply or demand in a market one variable we often want to study is total revenue the amount paid by buyers and received by sellers of the good. In any market total revenue is P*Q the price of the good times the quantity of the good sold. We can show total revenue graphically.The height of the box under the demand curve is P, and the width is Q. The area of this box, P*Q equals the total revenue in this market . How does total revenue change as one moves along the demand curve? The answer depends on the price elasticity of demand. If demand is inelastic as in then an increase in the price causes an increase in total revenue. Here an increase in price from $1 to $3 causes the quantity demanded to fall only from 100 to 80 total revenue rises from $ 100 to $240. An increase in price raises because the fall in is proportionately smaller than the rise P. We obtain the opposite result if demand is elastic: An incr...