Alex Tabarrok describes in his MRU video (link on right, reference below) how the elasticity of demand affects total revenue.
In the video, Tabarrok works through the cases of inelastic demand, where revenues rise as price rises, as elastic demand, where revenues fall as price rises, as displayed in the graphs below.
The problems with prohibition and the war on drugs
Tabarrok uses these concepts to explain why the war on drugs is so hard to win:
“Because demand for most illegal drugs is inelastic, drug dealers earn greater revenue and gain more power as the drug war becomes more effective.”
This can be seen in the following graph:
Record draught and record corn revenues
Tabarrok’s second policy example is the counterintuitive (to non economists) result of the 2012 drought in the American Midwest, when the average U.S. cornfield yielded less per acre than any year since 1995 but, on average, corn growers took in record revenues from their product.