Use the following to answer questions : $$\begin{array}{l}
\text { Table: Prices and Demand }\
\begin{array} { l c }
\hline \begin{array} { l }
\text { Quantity } \
\text { of Hats } \
\text { Demanded }
\end{array} & \begin{array} { c }
\text { Price } \
\text { per Hat }
\end{array} \
\hline 0 & \$ 30 \
1 & 28 \
2 & 26 \
3 & 24 \
4 & 22 \
5 & 20 \
6 & 18 \
7 & 16 \
8 & 14 \
\hline
\end{array}
\end{array}$$
-(Table: Prices and Demand)The Toronto Maple Leafs have a monopoly on Leafs logo hats.The marginal cost of producing a hat is $18.If the Leafs increase the number of hats they sell from 4 to 5,the price effect is a(n)_____ in total revenue of _____.
A) decrease;$20
B) increase;$20
C) decrease;$8
D) increase;$8

Question

Use the following to answer questions : $$\begin{array}{l}
\text { Table: Prices and Demand }\
\begin{array} { l c } 
\hline \begin{array} { l } 
\text { Quantity } \
\text { of Hats } \
\text { Demanded }
\end{array} & \begin{array} { c } 
\text { Price } \
\text { per Hat }
\end{array} \
\hline 0 & \$ 30 \
1 & 28 \
2 & 26 \
3 & 24 \
4 & 22 \
5 & 20 \
6 & 18 \
7 & 16 \
8 & 14 \
\hline
\end{array}
\end{array}$$
-(Table: Prices and Demand)The Toronto Maple Leafs have a monopoly on Leafs logo hats.The marginal cost of producing a hat is $18.If the Leafs increase the number of hats they sell from 4 to 5,the price effect is a(n)_____ in total revenue of _____.
A) decrease;$20
B) increase;$20
C) decrease;$8
D) increase;$8

Quizplus · Accepted Answer

The price effect refers to the change in total revenue due to a change in price. When the Leafs sell 5 hats instead of 4, the price per hat drops from $22 to $20, resulting in a decrease in total revenue of $8 (4 hats x $2 price drop).

Use the Following to Answer Questions -(Table: Prices and Demand)The Toronto Maple Leafs Have a Monopoly