Scenario: Mr. Olivander has a monopoly on supplying magic wands. The table below shows the demand schedule for magic wands per day.

-Refer to the scenario above.Mr.Olivander used to sell only one wand per day.Now he plans to increase his sale to two wands.The price effect of this plan is a ________,and the quantity effect of this plan is a ________ in his revenue.
A) $25 decrease; $65 increase
B) $90 decrease; $65 increase
C) $130 increase; $90 decrease
D) $65 decrease; $90 increase

Question

Scenario: Mr. Olivander has a monopoly on supplying magic wands. The table below shows the demand schedule for magic wands per day.
 
-Refer to the scenario above.Mr.Olivander used to sell only one wand per day.Now he plans to increase his sale to two wands.The price effect of this plan is a ________,and the quantity effect of this plan is a ________ in his revenue.
A) $25 decrease; $65 increase 
B) $90 decrease; $65 increase 
C) $130 increase; $90 decrease 
D) $65 decrease; $90 increase

Quizplus · Accepted Answer

The price effect is a decrease in price, as Mr. Olivander is now selling two wands for the same price as he used to sell one. The quantity effect is an increase in quantity, as Mr. Olivander is now selling two wands instead of one.