If the price of tuna fish increases from 50 cents to 60 cents per can and the quantity demanded decreases from 100 cans to 50 cans, then the tuna fish producer could increase its total revenue by
A) lowering price.
B) decreasing quantity supplied.
C) leaving price the same.
D) raising price.
E) decreasing supply.

Question

Quizplus · Accepted Answer

When the price was 50 cents, the revenue was 50 cents * 100 cans = $50. When the price increased to 60 cents, the revenue became 60 cents * 50 cans = $30. Lowering the price back to 50 cents would increase revenue back to $50, which is higher than $30.

If the Price of Tuna Fish Increases from 50 Cents