Final answer:
If demand is elastic, rent should not be increased to increase total revenue. If demand is inelastic, rent should be increased to increase total revenue. If demand has unitary elasticity, total revenue will remain unchanged regardless of price changes.
Step-by-step explanation:
The student's question is about how changes in demand can affect total revenue when the price of rent is raised. If demand is elastic, meaning that a small increase in price will result in a large decrease in quantity demanded, then raising the rent will lead to a decrease in total revenue. On the other hand, if demand is inelastic, meaning that a small increase in price will result in a small decrease in quantity demanded, then raising the rent will lead to an increase in total revenue. Finally, if demand has unitary elasticity, meaning that a change in price will result in an equal percentage change in quantity demanded, then total revenue will remain unchanged regardless of a price increase or decrease.