question archive A real estate developer is offering identical houses for sale for $350,000 each, and has 20 willing customers
A real estate developer is offering identical houses for sale for $350,000 each, and has 20 willing customers
Subject:EconomicsPrice:2.87 Bought7
A real estate developer is offering identical houses for sale for $350,000 each, and has 20 willing customers. The developer is considering lowering the price to $300,000, since at that price there would be an additional 3 customers willing to purchase houses. What would be the developer’s change in revenue from lowering the price in this way?
-$100,000
$100,000
$900,000
$1,050,000
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Answer:
-$100,000
Working: (350,000 * 20) - (300,000 * (20+3))
= 7,000,000 - 6,900,000
= - 1,00,000
