Question

At which price are revenues the lowest? Use the following chart:

Quantity Sold Price Total Costs
20 $20 $150
25 18 180
30 16 200
35 14 225
40 12 250
a. 14
b. $20
c. 18
d. 16
e. 12

Answer 1

To determine at which price revenues are the lowest, we need to calculate the total revenue (TR) at each price level. The total revenue is calculated as:

\[ \text{Total Revenue (TR)} = \text{Price} \times \text{Quantity Sold} \]

Let's calculate the total revenue for each price level in the chart:

1. **At price $20:**
- Quantity Sold = 20
- TR = $20 * 20 = $400

2. **At price $18:**
- Quantity Sold = 25
- TR = $18 * 25 = $450

3. **At price $16:**
- Quantity Sold = 30
- TR = $16 * 30 = $480

4. **At price $14:**
- Quantity Sold = 35
- TR = $14 * 35 = $490

5. **At price $12:**
- Quantity Sold = 40
- TR = $12 * 40 = $480

Next, we can summarize the total revenues calculated:

- At $20: $400
- At $18: $450
- At $16: $480
- At $14: $490
- At $12: $480

From the calculations, it's evident that the total revenue is lowest at the price of $20, where TR is $400.

Thus, the answer is:
**b. $20**