So total revenue changes in the direction of q . In that case, if demand is elastic and price increases, revenue will decrease. If demand is unit elastic, a change in price will keep revenue unchanged. So elasticity tells us the direction in which total revenue will change when price changes. Determinants of Elasticity Availability of substitutes - the higher the number of substitutes, the more responsive people are to price changes.
Elasticity increases with availability of substitutes.
Proportion of income used to buy the good - the higher the fraction of income spent on a good, the higher is elasticity. Temporary versus permanent change in price - if the price change is temporary people react more to it. Short run versus long run - elasticity increases over time. If there is a sudden price increase, individuals will take some time to find other substitutes and make suitable changes. So quantity will not respond much in the short run.