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14 July, 10:46

A monopolist can sell 26,000 units at a price of $30 per unit. lowering price by $1 raises the quantity demanded by 1,000 units. what is the change in total revenue resulting from this price change?

a. $1,500

b. $3,000

c. $5,500

d. - $2,800

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Answers (1)
  1. 14 July, 13:44
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    If he sells the shares at 30 per unit, the equation would be:

    30*26000=780000

    If he lowers the price to 29 per unit and ups the demand by 1k, it would be:

    29*27000=783000

    The resulting change would net him an additional 3000 dollars, so your answer would be B.
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