* The total revenue a business earns equals the total amount of goods and services sold times the price of those the goods and services. Price elasticity affects the total revenue in that it governs how much more or less revenue a business will make by changing the prices of products or services. For example, if a company currently sells 100 shirts a month at a price of $10, its total monthly revenue is $1,000. If it increases the price of shirts to $12, the company might still sell 95 shirts a month if the demand for shirts is relatively inelastic. At the new price level, the company earns $1,140 in total revenue a month. On the other hand, if consumers are very sensitive to the changes in the prices of shirts, the company might only sell 60 shirts a month at the $12 price. In this case, the companys total revenue would fall to $720 a month.