Does Increasing Prices Increase Revenue with Demand Q = 30 - 3P?

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SUMMARY

The discussion centers on the relationship between price and revenue in the context of a linear demand function represented by Q = 30 - 3P. Participants confirm that revenue (R) can be calculated as R = P * Q. To determine if increasing prices leads to increased revenue, one must analyze the elasticity of demand and the resulting changes in quantity sold as price varies.

PREREQUISITES
  • Understanding of linear demand functions
  • Knowledge of revenue calculations (R = P * Q)
  • Familiarity with price elasticity of demand
  • Basic algebra for manipulating equations
NEXT STEPS
  • Study the concept of price elasticity of demand
  • Learn how to derive revenue functions from demand equations
  • Explore the implications of linear versus nonlinear demand curves
  • Investigate real-world examples of pricing strategies and their impact on revenue
USEFUL FOR

Economics students, business analysts, and anyone interested in pricing strategies and revenue optimization.

chickenlips
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Hello~

I new here and I'd like a little help please.

Here is the question:
Suppose demand is given by Q = 30 – 3P. Does this indicate increasing prices increases revenue?

I'm not sure how to go about figuring this out...what should I look for?

Thank you in advance!
 
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chickenlips said:
Hello~

I new here and I'd like a little help please.

Here is the question:
Suppose demand is given by Q = 30 – 3P. Does this indicate increasing prices increases revenue?

I'm not sure how to go about figuring this out...what should I look for?

Thank you in advance!

Revenue is P*Q, so you take P*Q and you tell me if increasing the price will increase revenue.
 

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