When a monopolist charges $10 for its product, it sells 500 units of the product. When it lowers the price to $6, it sells 1,400 units of the product.
-Refer to the scenario above. What is the quantity effect of the price change?
A) $1,400
B) $2,700
C) $5,400
D) $6,750

Question

Quizplus · Accepted Answer

The quantity effect is calculated by multiplying the change in quantity sold by the new price: (1,400 - 500) units * $6 = $5,400.

When a Monopolist Charges $10 for Its Product, It Sells