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

Question

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