Table 2 shows Media Cable’s demand table, total revenue, and marginal revenue at each price. What is the price effect of reducing the price from $100 to $80?Table 2PriceAmount DemandedTotal RevenueMarginal Revenue$1600$0n/a$13090$11,700$130.00$100200$20,000$75.45$80350$28,000$53.33$40600$24,000-$16.00$0850$0-$96.00Question 5 options: a) $4,000 b) -$20,000 c) $28,000 d) -$4,000 e) $12,000

Answered: Table 2 shows Media Cable’s demand…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Table 2 shows Media Cable’s demand table, total revenue, and marginal revenue at each price. What is the price 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

Question 5 options:

$4,000

-$20,000

$28,000

-$4,000

$12,000

Expert Solution

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When price of good decreases, quantity demanded increases. Decrease in price has negative effect on total revenue and increase in quantity has positive effect on total revenue.

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