Refer to the graph above.If the price of the product decreases from $6 to $5 because of a decrease in demand (not shown),total revenue would:
A) increase by $300.
B) increase by $100.
C) decrease.
D) stay the same.

Question

Refer to the graph above.If the price of the product decreases from $6 to $5 because of a decrease in demand (not shown),total revenue would:
A) increase by $300. 
B) increase by $100. 
C) decrease. 
D) stay the same.

Quizplus · Accepted Answer

The graph shows that the point of maximum revenue is at a price of $4 and a quantity of 20. Therefore, any decrease in price from $6 to $5 would result in a decrease in revenue.

Refer to the Graph Above