Below is a demand curve for DVDs for a monopoly currently producing at point
b. Specify answers to the nearest dollar, and use a negative sign to indicate decreases in revenue. If the firm lowers DVD prices from $16 to $14, what is the change in revenue assuming quantity remains the same? In other words, focus only on the price effect. What is the change in revenue that results just from the increased quantity at $14? In other words, focus only on the quantity effect. on the quantity effect. What is the overall net effect of this price decrease on the firm's total revenue? What is the price elasticity of demand here?
