Econ Question - Inferior Goods

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In summary, the conversation is about a person seeking help with a question regarding the relationship between demand, price, and revenue. The question asks if increasing prices will result in an increase in revenue, and the person is unsure of how to solve it. The summary concludes with a prompt to calculate P*Q to determine the answer.
  • #1
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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  • #2
moving this request to the homework section
 
  • #3
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.
 

What is an inferior good?

An inferior good is a type of good that experiences a decrease in demand as consumer income increases. In other words, consumers tend to purchase less of this good when they have more money to spend.

What are some examples of inferior goods?

Some examples of inferior goods include generic or store-brand products, second-hand items, and public transportation. These goods are typically seen as less desirable or of lower quality compared to other alternatives.

How does the demand for inferior goods change?

As consumer income increases, the demand for inferior goods decreases. This is due to the fact that consumers have more disposable income to spend on higher quality or more desirable goods.

Why do inferior goods experience a decrease in demand as income increases?

This phenomenon is known as the income effect. As income increases, consumers are able to afford more expensive or higher quality goods, making the inferior good less attractive.

Are all inferior goods of low quality?

No, not all inferior goods are of low quality. Some may actually be of similar or even higher quality compared to other alternatives, but they are still considered inferior because they are seen as less desirable by consumers.

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