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Price (P) $50 $30 Demand 800 1,200 Quantity (Q) In the figure above, when the price increases from point A to point B, the price effect on Total Revenue (the revenue gain from raising the price on units that would have sold at a lower price) is: Select one: O a. $8,000 O b. $10,000 c. $16,000 d. $12,000

Price (P) $50 $30 Demand 800 1,200 Quantity (Q) In the figure above, when the price increases from point A to point B, the price effect on Total Revenue (the revenue gain from raising the price on units that would have sold at a lower price) is: Select one: O a. $8,000 O b. $10,000 c. $16,000 d. $12,000

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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In the figure above, we have a demand graph showing the relationship between Price (P) and Quantity (Q). **Graph Description:** - **Axes:** - The vertical axis represents Price (P) in dollars. - The horizontal axis represents Quantity (Q). - **Demand Line:** A downward-sloping line labeled "Demand" illustrates the inverse relationship between price and quantity demanded. - **Points:** - **Point A** is where the price is $30, and the quantity is 1,200. - **Point B** is where the price is $50, and the quantity is 800. **Explanation:** As the price increases from Point A to Point B, we need to analyze the effect on Total Revenue, specifically the revenue gain from raising the price on units that would have sold at the lower price. **Options for Total Revenue Gain:** Select one: - a. $8,000 - b. $10,000 - c. $16,000 - d. $12,000 Consider which of these options correctly estimates the revenue gain from the price increase.
Transcribed Image Text:In the figure above, we have a demand graph showing the relationship between Price (P) and Quantity (Q). **Graph Description:** - **Axes:** - The vertical axis represents Price (P) in dollars. - The horizontal axis represents Quantity (Q). - **Demand Line:** A downward-sloping line labeled "Demand" illustrates the inverse relationship between price and quantity demanded. - **Points:** - **Point A** is where the price is $30, and the quantity is 1,200. - **Point B** is where the price is $50, and the quantity is 800. **Explanation:** As the price increases from Point A to Point B, we need to analyze the effect on Total Revenue, specifically the revenue gain from raising the price on units that would have sold at the lower price. **Options for Total Revenue Gain:** Select one: - a. $8,000 - b. $10,000 - c. $16,000 - d. $12,000 Consider which of these options correctly estimates the revenue gain from the price increase.
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The price increases from $ 30 to $ 50. This will lead to decrease in quantity from 1,200 to 800.

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