How Does Increasing Prices Affect Revenue in Inelastic Markets?

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The discussion revolves around the relationship between price and revenue growth in a competitive market. It explores the implications of maintaining high prices while experiencing increasing revenue. The key points highlight that high prices can coexist with growing demand, suggesting that the firm may not be facing elastic demand. Factors influencing this scenario include a leftward shift in the supply curve, which indicates reduced supply, and the presence of substitutes that may not be as appealing. The conversation also touches on concepts like "spatial monopoly," which considers how store location and consumer information can affect demand acceptance despite higher prices. Overall, the discussion seeks to clarify the dynamics of demand in relation to pricing strategies and revenue outcomes.
domyy
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I'd like to know how increase in revenue in related to price.

If I have high prices compared to my competitors, and my revenue keeps growing...

what does that mean?

Does it mean my demand keeps growing even though I have high prices?

In this case, my firm is inelastic?
 
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I don't think so, the term is reserved for "demand" isn't?
 


I am so confused!
I need to put this together:

- Supply curve shifts to the left (supply is reduced)
- It has high prices compared to substitutes
- Higher revenues each year.

What is does that tell me about demand? What`s happening to demand?
 


What kind of research is this?

Is this homework?

There are several factors why demand is still accepting the price. Two of them are information, and spatial location of the stores. There is a concept known as "Spatial monopoly".
 


It was for my assignment. I already did it though. Hoping I am going to get a good grade. :)
 

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