a-company-raises-its-product-price-from-30-to-35-causing-quantity-demanded-to-dr

Question

A company raises its product price from $$30 to 35$$, causing quantity demanded to drop from 600 units to 500 units. Which effect is greater, price effect or quantity effect?

Accepted Answer

Quantity effect is greater, as total revenue decreases.

Answer

Neither effect is significant, as total revenue is unaffected.

Answer

Both effects are equal, as total revenue remains unchanged.

Answer

Price effect is greater, as total revenue increases.

A company raises its product price from \$30 to \$35, causing quantity demanded to drop from 600 units to 500 units. Which effect is greater, price effect or quantity effect?