A pure monopoly sells 6 units of a product per day at a unit price of $15. If it lowers the price to $14, its total revenue increases by $22. This implies that its sold output increases by

Multiple Choice

4 units per day.

3 units per day.

2 units per day.

1 unit per day.

Question

Business

Tristian

21 February, 18:28

A pure monopoly sells 6 units of a product per day at a unit price of $15. If it lowers the price to $14, its total revenue increases by $22. This implies that its sold output increases by

Multiple Choice

4 units per day.

3 units per day.

2 units per day.

1 unit per day.

+1

Answers (1)

Know the Answer?

Reed Tapia · Answer 1

The correct answer is C (2 units)

Explanation:

Giving the following information:

A pure monopoly sells 6 units of a product per day at a unit price of $15. If it lowers the price to $14, its total revenue increases by $22.

First, we need to calculate the actual revenue:

Revenue = 6units * $15 = $90

Now, we calculate the new revenue and calculate the total units sold:

Revenue = 90 + 22 = $112

Total units = $112/$14 = 8 units

Incremental = 2 units

A pure monopoly sells 6 units of a product per day at a unit price of $15. If it lowers the price to $14, its total revenue increases by $22. This implies that its sold output increases byMultiple Choice4 units per day.3 units per day.2 units per day.1 unit per day.

A pure monopoly sells 6 units of a product per day at a unit price of $15. If it lowers the price to $14, its total revenue increases by $22. This implies that its sold output increases by

Multiple Choice

4 units per day.

3 units per day.

2 units per day.

1 unit per day.