A monopolist sells 6 units of a product per day at a unit price of $15. if it lowers price to $14, its total revenue increases by $22. this implies that its sales quantity increases by

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Business

Malachi Shepherd

11 December, 13:20

A monopolist sells 6 units of a product per day at a unit price of $15. if it lowers price to $14, its total revenue increases by $22. this implies that its sales quantity increases by

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Dharma · Answer 1

A monopolist sells 6 units of a product per day at a unit price of $15. if it lowers price to $14, its total revenue increases by $22. this implies that its sales quantity increases by: 8 units.

To solve for the original sales amount: (6 units) ($15) = $90

Next find the new unit amount: (8 units) ($14) = $112

The difference between these two is a $22 sales increase which means to have the difference in sales be $22 there were 8 units sold instead of 6 units.