What is the total revenue test for elasticity?

• A. A method that infers demand elasticity by observing how total revenue changes after a price change: if TR moves opposite to price it's elastic, if TR moves with price it's inelastic, and if TR is unchanged it's unit elastic.
• B. A method that calculates elasticity by comparing percentage changes in quantity demanded to percentage changes in price using the percentage change formula.
• C. A method that determines elasticity by checking the sign of marginal revenue: positive MR implies elastic demand, negative MR implies inelastic demand, and zero MR implies unit elasticity.
• D. A method that estimates elasticity by measuring the slope of the demand curve (change in price divided by change in quantity) rather than by revenue changes.

Answer: (A)