A monopolist can sell 10,000 units at a price of $17. Lowering price by $2 raises the quantity demanded by 2,000 units. What is the change in total revenue that results from this price change

The change in total revenue is $10000

The percentage change in Total revenue is 5.88%

Explanation:

The revenue is a function of price multiplied by quantity sold.

Revenue = Price * Quantity sold

At the orignal price of $17, the monopolist is earning a revenue of,

Revenue at $17 = 10000 * 17 = $170000

The revised price for the monopolist is $17 - $2  = $15

The revised demand and expected sales at the revised price is 10000 + 2000 = 12000 units

The revenue at the revised values is,

Revenue at $15 = 12000 * 15 = $180000

The change in Total revenue = 180000 - 170000 = $10000

The percentage change in revenue = 10000 / 170000 = 0.0588 or 5.88%

the answer would be voluntary exchange -

"the act of buyers and sellers freely and willingly engaging in market transactions. moreover, transactions are made in such a way that both the buyer and the seller are better off after the exchange than before it occurred."

hope this : )

-shy