Use the following to answer question:
Figure: The Market for Gas Stations
-(Figure: The Market for Gas Stations)Use Figure: The Market for Gas Stations.The figure shows curves facing a typical gas station in a large town.The market is characterized by many firms,differentiated products,easy entry,and easy exit.If the gas station shown here were to raise its price above the profit-maximizing price,the outcome would be _____ in total revenue.
A)a reduction
B)an increase
C)no change
D)Not enough information is given to answer the question.

Question

Use the following to answer question:
Figure: The Market for Gas Stations 
-(Figure: The Market for Gas Stations)Use Figure: The Market for Gas Stations.The figure shows curves facing a typical gas station in a large town.The market is characterized by many firms,differentiated products,easy entry,and easy exit.If the gas station shown here were to raise its price above the profit-maximizing price,the outcome would be _____ in total revenue.
A)a reduction 
B)an increase 
C)no change 
D)Not enough information is given to answer the question.

Quizplus · Accepted Answer

If the gas station were to raise its price above the profit-maximizing price, it would face a decrease in quantity demanded as consumers switch to alternative gas stations that charge lower prices. This would lead to a reduction in total revenue.

Use the Following to Answer Question