When demand is inelastic, price and total revenue are directly related. When demand is unit elastic, total revenue is constant. The greater the availability of close substitutes, the more elastic the demand. The more time a consumer has to adjust to a price change, the more elastic the demand. The larger the share of the item in the consumer's budget, the more elastic the demand.
Marginal revenue is the change in total revenue per unit change in quantity.
Other Elasticities Elasticity is a generic concept which examines the relationship between two variables. Any two related variables can be used. Since the 's are constants, the elasticities depend on the ratios of the variables. Regression Analysis Econometrics An field in economics which applies statistical analysis to economic phenomena. Objective is to quantify relationships between variables.