Final answer:
In the context of elastic demand, 'Total revenue increases if price is increased' is not a characteristic of elastic demand, because with elastic demand, the percentage decrease in quantity demanded is greater than the percentage increase in price, causing total revenue to fall instead.
Step-by-step explanation:
The characteristic of the demand for a commodity that is elastic is that the demand is highly responsive to changes in price. When the demand is elastic, the elasticity coefficient is greater than one. This indicates that if there is a change in price, the quantity demanded will change by a greater percentage than the price did.
- The relative change in quantity demanded is greater than the relative change in price.
- Buyers are relatively sensitive to price changes.
- Total revenue decreases if price is increased – this is because the loss in revenue from selling fewer units (due to higher price) is greater than the gain from the higher price per unit.
- The elasticity coefficient is greater than one.
Therefore, the characteristic that is not true for an elastic demand is 'C. Total revenue increases if price is increased.' For elastic demand, total revenue would decrease if the price is increased, because the percentage decrease in quantity demanded will be greater than the percentage increase in price, leading to a fall in total revenue.