Question

23. Refer to Figure 47. The shit from Db to Da is called 2. increase in quantity demanded h. a decrease in antity demanded cancroase in demand da decrease in demand Figure 543 Demand 20 100 150 200 25000 35000 65000 550 24. Refer to Figure 5-8. An increase in price from $15 to $20 would 2. increase total revenue by 5500 b. decrease total revenue by 5500 c. increase total revenue by $1,000 d. decrease total revenue by $1,000 Dopo Cangage Learning Powered by Cogner

Answer 1

Answer to Q.23: d) Decrease in Demand

Explanation:

Decrease in Demand refers to a fall in the demand of a commodity caused due to any factor other than the own price of the commodity. In this case, demand falls at the same price or demand remains same even at lower price. It leads to a leftward shift in the demand curve.

Various Reasons for Shift in Demand Curve:

(i) Change in price of substitute goods;

(ii) Change in price of complementary goods;

(iii) Change in income of consumers;

(iv) Change in tastes and preferences;

(v) Expectation of change in price in future;

(vi) Change in population;

(vii) Change in distribution of income;

(viii) Change in season and weather.

Answer to Q.24: b)Decrease in total revenue by $500

Working:

Stage 1 : Price = $15

Quantity Demanded = 300 Units

Total Revenue= Price x Quantity Demanded=15 x 300 = $ 4500

Stage 2 : Price = $20

Quantity Demanded = 200 Units

Total Revenue= Price x Quantity Demanded=20 x 200 = $ 4000

Change in Revenue = $4500-$4000=$500