A Level Economics (9708)•9708/11/O/N/23
Explanation
Total Revenue Changes with Price in Demand Schedule
Steps:
- Identify quantity demanded at each price from the schedule.
- Calculate total revenue (TR) as price multiplied by quantity for 30.
- Compare TR values: TR at 400 (10 units), TR at 600 (20 units).
- Conclude revenue rises when price falls from 30 due to elastic demand in this range.
Why C is correct:
- Total revenue increases when price decreases along an elastic portion of the demand curve, as quantity demanded rises more than proportionally (law of demand).
Why the others are wrong:
- A: Profit requires cost data, absent here.
- B: Profit depends on costs, not just price changes; insufficient info.
- D: TR is higher at 600) than 400), so not maximized at $40.
Final answer: C
Topic: Types of cost, revenue and profit, short-run and long-run production
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