<p>The theory says that <strong>total revenue</strong> remains the same. That is not the same as claiming <strong>total profit</strong> is same.</p>
<p>Total revenue is by definition given as a price times quantity: <span class="math-container">$R=PQ$</span>.</p>
<p>Total profit on the other hand is given as total revenue minus total costs: <span class="math-container">$\Pi= PQ -TC$</span>.</p>
<p>Total <em>revenue</em> won’t change when demand is unit elastic (for small changes from current point), but total <em>profit</em> can change.</p>

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2023-10-23T11:35:33.443Z
2023-10-23T11:35:33.443Z
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<p>according to the theory (if p-p1=q-q1), the total revenue remains the same because the demand decreases by the same percentage price does. If this is the elasticity of a product, the company increasing prices will lead to a decrease in demand but the total revenue will remain the same but the amount spent on producing these products decrease when the demand decreases corresponding to the increase in price.. so since the company is now spending less in the production, isn't it more profitable to increase the price than not change the price?</p>

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2023-10-23T15:14:38.093Z
If the supplier has a monopoly, then increasing demand for the same total revenue and lower cost would be profitable.  But in a competitive market, a supplier raising prices will lead to lower revenue for that supplier as consumers switch to other cheaper suppliers.
Henry
<microeconomics><supply-and-demand><elasticity><demand>
why is increasing price not more profitable when the demand is unitary elastic?
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# why is increasing price not more profitable when the demand is unitary elastic?

(Asked by: username_0 on 2023-10-23)

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according to the theory (if p-p1=q-q1), the total revenue remains the same because the demand decreases by the same percentage price does. If this is the elasticity of a product, the company increasing prices will lead to a decrease in demand but the total revenue will remain the same but the amount spent on producing these products decrease when the demand decreases corresponding to the increase in price.. so since the company is now spending less in the production, isn't it more profitable to increase the price than not change the price?

**Tags:** microeconomics, supply-and-demand, elasticity, demand

> **Comments:**
> **username_1**: If the supplier has a monopoly, then increasing demand for the same total revenue and lower cost would be profitable.  But in a competitive market, a supplier raising prices will lead to lower revenue for that supplier as consumers switch to other cheaper suppliers.  

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## 1 answers

### Answer by username_2 on 2023-10-23. Score: 1 | Accepted answer

The theory says that **total revenue** remains the same. That is not the same as claiming **total profit** is same.

Total revenue is by definition given as a price times quantity: $R=PQ$.

Total profit on the other hand is given as total revenue minus total costs: $\Pi= PQ -TC$.

Total *revenue* won’t change when demand is unit elastic (for small changes from current point), but total *profit* can change.


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