. Let us assume that dairy farmers thin their herds in order to reduce costs and increase the price of milk. Accordingly, the price of a gallon of milk rises from $2.30/gal to $2.85/gal. Because of the price increase, the amount of milk consumed in the U.S. falls from 21.5 gal./person per year to 20.6 gal./person per year. What is the price elasticity of demand in this range? Is demand elastic or inelastic? Does the Total Revenue Test confirm? Was it a good decision on the part of dairy farmers?