The Figure Below Shows the Demand Schedule and Demand Curve

question 93

Multiple Choice

The figure below shows the demand schedule and demand curve for a product produced by a single-price monopolist. FIGURE 10-1
-Refer to Figure 10-1.Suppose this single-price monopolist is initially selling 5 units at $8 each and then reduces the price of the product to $6.By making this change,the firm is giving up revenue of ________ on the original number of units sold and gaining revenue of ________ on the additional units sold.Its marginal revenue is therefore ________.(All figures are dollars.)

• A)38; 40; 2
• B)8; 6; 2
• C)10; 12; 2
• D)14; 14; 0
• E)5; 7; -2

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Definitions:

Operating Cash Flow

Measurement of the cash generated by a company's normal business operations.

Quantity Sold

The total number of units of a product or service that have been sold within a specific period.

NPV

Net Present Value; a calculation that compares the present value of cash inflows to the present value of cash outflows over a period of time.

Break-Even Level

The point at which total costs and total revenue are equal, resulting in no net loss or gain, and the point at which a business, product, or service becomes profitable.