Use the following to answer question:
Figure: The Restaurant Market
-(Figure: The Restaurant Market)Use Figure: The Restaurant Market.The figure shows curves facing a typical restaurant.Assume that many firms,differentiated products,and easy entry and exit characterize the restaurant market.If the restaurant shown here were to raise its price above the profit-maximizing price,its total revenue would:
A)decrease.
B)increase.
C)not change.
D)Not enough information is given to answer the question.

Question

Use the following to answer question:
Figure: The Restaurant Market 
-(Figure: The Restaurant Market)Use Figure: The Restaurant Market.The figure shows curves facing a typical restaurant.Assume that many firms,differentiated products,and easy entry and exit characterize the restaurant market.If the restaurant shown here were to raise its price above the profit-maximizing price,its total revenue would:
A)decrease. 
B)increase. 
C)not change. 
D)Not enough information is given to answer the question.

Quizplus · Accepted Answer

According to the demand curve, as the price of the restaurant increases the quantity demanded decreases. Therefore, if the restaurant raises its price above the profit-maximizing price, it will decrease the quantity demanded resulting in a decrease in total revenue.

Use the Following to Answer Question