According to Figure 13-7 above,if Red Baron raises its price frozen cheese pizzas from $6 per pizza to $7 per pizza,what happens to total revenue?
A)total revenue goes up
B)total revenue goes down
C)total revenue stays the same
D)total revenue is not related to the price charged
E)it is impossible to tell from the information given in the figure

Question

Quizplus · Accepted Answer

According to the figure, the demand curve for Red Baron frozen cheese pizzas is downward sloping, which means that as the price increases, the quantity demanded decreases. Therefore, if the price is raised from $6 to $7 per pizza, the quantity demanded will decrease, resulting in a decrease in total revenue (TR = Price x Quantity Demanded). Therefore, total revenue will go down.

According to Figure 13-7 Above,if Red Baron Raises Its Price