Assume that the supply curve for a good is fixed at 100 units. Now suppose that the demand curve for the good increases such that the equilibrium price rises from $20 to $30. How does total revenue for the sale of this product change?
A) Total revenue rises by $1,000.
B) Total revenue does not change.
C) Total revenue rises by $3,000.
D) Total revenue rises by $10.

Question

Quizplus · Accepted Answer

Total revenue is calculated as price multiplied by quantity. Initially, total revenue is $20 * 100 = $2,000. After the price increase, total revenue is $30 * 100 = $3,000. The change in total revenue is $3,000 - $2,000 = $1,000.

Assume That the Supply Curve for a Good Is Fixed