How Does Increasing Prices Affect Revenue in Inelastic Markets?

[domyy]

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?

 

[nitsuj]

I don't think so, the term is reserved for "demand" isn't?

 

[domyy]

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?

 

[Pyrrhus]

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".

 

[domyy]

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