Restaurant meals have a demand elasticity of 2.27. If a restaurant raises its prices by 10 percent, quantity demanded falls by 22.7 percent, as . What happens to the restaurant's total revenue?

1. Total revenue is price multiplied by quantity, so a 10 percent price rise alone would raise revenue if quantity did not change. 2. But quantity demanded falls by 22.7 percent here, a much larger percentage than the 10 percent price rise. 3. Since elasticity of 2.27 is above one, demand is elastic, and Table 5.3 states that under elastic demand a price rise causes total revenue to fall. 4. The large drop in quantity outweighs the price increase, so total revenue falls rather than rising. 5. This shows why option A, which assumes revenue rises whenever price rises, is the classic trap for an elastic good. _Source: OpenStax Principles of Microeconomics for AP Courses (CC BY 4.0), Ch 5 "Elasticity", section 5.3 | Elasticity and Pricing_