Table 2 shows Media Cable’s demand table, total revenue, and marginal revenue at each price. What is the quantity effect of reducing the price from $100 to $80?
Table 2 shows Media Cable’s demand table, total revenue, and marginal revenue at each price. What is the quantity effect of reducing the price from $100 to $80?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
Table 2 shows Media Cable’s demand table, total revenue, and marginal revenue at each price. What is the quantity effect of reducing the price from $100 to $80?
Table 2
Price |
Amount Demanded |
Total Revenue |
Marginal Revenue |
$160 |
0 |
$0 |
n/a |
$130 |
90 |
$11,700 |
$130.00 |
$100 |
200 |
$20,000 |
$75.45 |
$80 |
350 |
$28,000 |
$53.33 |
$40 |
600 |
$24,000 |
-$16.00 |
$0 |
850 |
$0 |
-$96.00 |
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Expert Solution
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Introduction
Quantity effects occurs when change in price affects the quantity, and it results into change in total revenue as well.
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