More generally, whenever elasticity is less than one, and price is cut, sales revenue will decline along with the price. On the other hand, when elasticity is greater than one, and the price is cut, the sales revenue will increase. The impacts of price increases on sales revenue also depend on elasticity. Finally, if the elasticity of demand is exactly one, a cut in price will be just exactly offset by the increase in sales, so in that case, there will be no change in sales revenue.
It will be more convenient to express these relationships in a table. Here is how price changes, elasticity and revenue changes are interrelated:
| When elasticity is | And price | Then revenue |
|---|---|---|
| >1 | increases | decreases |
| >1 | decreases | increases |
| =1 | increases | doesn't change |
| =1 | decreases | doesn't change |
| <1 | increases | increases |
| <1 | decreases | decreases |
