A Monopolist Can Sell 8,000 Units at a Price of $10

question 18

Multiple Choice

A monopolist can sell 8,000 units at a price of $10 per unit. Lowering price to all buyers by $1 raises the quantity demanded by 500 units. What is the change in total revenue resulting from this price change?

• A)$3,500
• B)-$12,500
• C)-$3,500
• D)-$18,000
• E)​There is not enough information provided to answer the question.

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Definitions:

Security's Beta

A measure of an investment's volatility compared to the market as a whole, indicating its risk in relation to the market.

Risk Premium

The extra return expected from an investment for taking on additional risk.

Security Market Line

A graphical representation of the expected return of an asset compared to its risk, as measured by beta.

Systematic Risk

The risk inherent to the entire market or an entire market segment, which cannot be eliminated through diversification.