A monopolist can sell 8,000 units at a price of $15.Lowering price by $2 raises the quantity demanded by 2,000 units.What is the change in total revenue that results from this price change?

Question

Quizplus · Accepted Answer

The change in total revenue is equal to the change in price multiplied by the change in quantity demanded. In this case, the change in price is -$2 and the change in quantity demanded is 2,000 units. Therefore, the change in total revenue is -$2 * 2,000 = -$4,000.

A Monopolist Can Sell 8,000 Units at a Price of $15.Lowering