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9 August, 18:38

A real estate developer is offering identical houses for sale for $350,000 each, and has 20 willing customers. The developer is considering lowering the price to $300,000, since at that price there would be an additional 3 customers willing to purchase houses.

What would be the developer's change in revenue from lowering the price in this way?

a. - $100,000

b. $100,000

c. $900,000

d. $1,050,000

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  1. 9 August, 21:00
    0
    Change in revenue will be - $100000

    So option (a) will be correct answer

    Explanation:

    We have given amount of sale for each house = $350000

    It is given 20 costumers are willing to sell

    Now it is given that if price is lowering to $300000 then 3 more costumers are willing to purchase.

    We have to find the developer's change in revenue.

    So change in revenue will be equal to = $350000*20 - $300000 * (20+3) = - $100000

    So change in revenue will be equal to - $100000

    So option (a) will be correct answer.
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