Questions: The table shows the demand curve for barrels of spring water sold by James, a monopolist. Water Monopoly Price per barrel Number of barrels 16 0 15 1 14 2 13 3 12 4 11 5 10 6 9 7 8 9 7 10 6 If James lowers his price from 11 to 10, the quantity effect is -

The table shows the demand curve for barrels of spring water sold by James, a monopolist.

Water Monopoly

Price per barrel Number of barrels

16 0

15 1

14 2

13 3

12 4

11 5

10 6

9 7

8 9

7 10

6

If James lowers his price from 11 to 10, the quantity effect is -

Transcript text: $A A$ achieve.macmillanlearning.com Ch. 10 LearningCurve: Monopoly - Rutgers ics-02 - Achieve The table shows the demand curve for barrels of spring water sold by James, a monopolist. \begin{tabular}{|l|l|} \hline \multicolumn{2}{|l|}{ Water Monopoly } \\ \hline Price per barrel Number of barrels \\ \hline$\$ 16$ & 0 \\ \hline 15 & 1 \\ \hline 14 & 2 \\ \hline 13 & 3 \\ \hline 12 & 4 \\ \hline 11 & 5 \\ \hline 10 & 6 \\ \hline 9 & 7 \\ \hline 8 & 9 \\ \hline 7 & 10 \\ \hline 6 & \\ \hline \end{tabular} If James lowers his price from $\$ 11$ to $\$ 10$, the quantity effect is $\$$ $\qquad$ - $\square$ Need help on this question?

Solution

To determine the quantity effect when James lowers his price from \$11 to \$10, we need to calculate the change in total revenue due to the increase in quantity sold.

Identify the initial and new quantities and prices:
- Initial price: \$11
- New price: \$10
- Initial quantity sold at \$11: 5 barrels
- New quantity sold at \$10: 6 barrels
Calculate the change in quantity:
- Change in quantity = New quantity - Initial quantity = 6 - 5 = 1 barrel
Calculate the quantity effect:
- The quantity effect is the additional revenue generated from selling the additional barrel at the new price.
- Quantity effect = Change in quantity × New price = 1 barrel × \$10 = \$10