A monopolist can sell 10,000 units at a price of $17. 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 initial revenue is 10,000 units * $17 = $170,000. After the price decrease, the new price is $15, and the quantity sold is 12,000 units, leading to a revenue of 12,000 units * $15 = $180,000. The change in total revenue is $180,000 - $170,000 = $10,000.

A Monopolist Can Sell 10,000 Units at a Price of $17