Imagine yourself a shop keeper, hoping to boost the money coming in at the till. If you increase prices by 10%, you will get more? Right?
That depends on the elasticity of demand. If the elasticity is two, the drop in demand is twice the increase in price. 0.8 times 1.1 is 0.88. Takings fall from $100 to $88.
But if the elasticity is one half, the drop in demand is half the increase in price. 0.95 times 1.1 is 1.045. Takings rise from $100 to $104.5.
When the price goes up the shop always sells less goods, (Law of Demand) but that still leaves it unclear whether more or less money goes in the till. This is first year University economics today.
Back in 1865, it was obvious to every-one that the increased efficiency of steam engines would lead to a reduced demand for coal. Jevons pointed out that increased efficiency makes steam power cheaper. Goodbye water wheel, hello steam engine. More steam engines, greater consumption of steam power, any-one who wants to make a prediction needs to invent the concept of elasticity and try to measure it. Greater than one? Less than one? That is going to decide whether total demand rises or falls.