Final answer:
The price elasticity of demand measures the responsiveness of quantity demanded to a change in price. Elastic demand occurs when a decrease in price increases total revenue.
Step-by-step explanation:
The price elasticity of demand measures the responsiveness of quantity demanded to a change in price. If a decrease in price would increase total revenue, it means that demand is elastic, meaning that the quantity demanded is relatively sensitive to a change in price. In this case, a decrease in price will result in a proportionally larger increase in the quantity demanded, leading to an increase in total revenue.
Elasticity values greater than 1 represent elastic demand, while values less than 1 represent inelastic demand. Option 2) 4 can be the price elasticity of demand for a good for which a decrease in price would increase total revenue, as it falls within the range of elastic demand where quantity demanded is highly sensitive to a change in price.