Table 14-8
The following table provides information on the price,quantity,and average total cost for a monopoly.

-Refer to Table 14-8.How much extra revenue does the monopolist earn when he lowers the price from $18 to $12?
A) $10
B) $12
C) $30
D) $41

Question

Table 14-8
The following table provides information on the price,quantity,and average total cost for a monopoly.
 
-Refer to Table 14-8.How much extra revenue does the monopolist earn when he lowers the price from $18 to $12?
A) $10 
B) $12 
C) $30 
D) $41

Quizplus · Accepted Answer

From the table, we see that the monopolist sells 10 units at a price of $18, which gives total revenue of $180. At a price of $12, the monopolist sells 18 units, which gives total revenue of $216. The extra revenue earned is $216 - $180 = $36. However, the monopolist also incurs extra costs from producing and selling the additional 8 units, which is $6 ($72 - $66). Therefore, the net extra revenue earned is $36 - $6 = $30. Choice C is the correct answer.

Table 14-8 The Following Table Provides Information on the Price,quantity,and Average Total