The manager says, "We need to make more money. Raise prices!" Will her genius pricing strategy work?

Concept #1: Total Revenue Test

Practice: The following demand schedule relates to the market for computer chips. What happens to total revenue if the price falls from $400 to $350?

Practice: A price change causes the quantity demanded of a good to decrease by 20 percent, while the total revenue increased by 10 percent. The demand curve is: