Question

In: Economics

King Hardware sold 7 pounds of bolts yesterday at a price of $5,.00 per pound.



King Hardware sold 7 pounds of bolts yesterday at a price of $5,.00 per pound. This point is represented by the black plus symbol on the diagram below, which plots he price of bolts (measured in dollars, per pound) and the quantity sold (measured in pounds).

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Each small square in the grid for this graph has one side equal to 1 pound of bolts and one side equal to 1 dollar per pound. The area of one small square is therefore _______ .

There are _______ small squares in the purple shaded rectangle 


On this graph, the area of the purple rectangle corresponds to: 

  • King Hardware's revenue from selling bolts, measured in dollars

  • The price of the bolts, measured in dollars per pound

  • The number of bolts that King Hardware sold, measured in pounds

  • None of these-the area has no meaning


Now suppose Jack Hardware lowers its price to $6.00 per pound of bolts. As a result, it now sells 5 pounds of bolts. 

Use the blue rectangle to draw the area that corresponds to the new price and quantity 


Did lowering the price of bolts increase King Hardware's revenue? 


Solutions

Expert Solution

Rahul Sunny answered 2 years ago
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