[oakrb]

From your response, it seems as though you are saying, to calculate “A” we must always assume that the demand will be equal zero. Therefore, the that the current must always be increased by b times the current quantity. Is this correct?

Because I did the calculations in example 5 as a subtraction from the current price simple because the second sentence stated “a REDUCTION in the selling price of $1 will result in an addition sales of 100 units”. Please correct me if I am wrong.

Thanks.

[oakrb]

I have been watching the lectures and they are really quite good. That is why I was able to ask you why you added $20 to the current price of $30 in you explanation. Although I understand the concept, “a’ in the formula is the price at which the quantity will be zero, the calculations seem a bit unclear in example 5.

Increasing the selling price means a reduction in the quantity sold. Reducing the selling price means an increase in the quantity.

Must I ALWAYS increase the current price after calculating b times q? Is there anytime I would subtract b times q from the current price. This is critical for me to understand just looking for a bit of clarity

Thanks

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