Jack Hardware sold 8 pounds of screws yesterday at a price of $5.00 per pound. T
ID: 1143325 • Letter: J
Question
Jack Hardware sold 8 pounds of screws yesterday at a price of $5.00 per pound. This point is represented by the black plus symbol on the diagram below, which plots the price of screws (measured in dollars per pound) and the quantity sold (measured in pounds). New Price/Quantity 0 1 2 3 4 5 6 7 8 9 10 10 9 8 7 6 5 4 3 2 1 0 PRICE (Dollars per pound) SCREWS (Pounds) Each small square in the grid for this graph has one side equal to 1 pound of screws and one side equal to 1 dollar per pound. The area of one small square is therefore . There aresmall squares in the purple shaded rectangle. On this graph, the area of the purple rectangle corresponds to: Jack Hardware’s revenue from selling screws, measured in dollars The price of the screws, measured in dollars per pound The number of screws that Jack Hardware sold, measured in pounds None of these—the area has no meaning Now suppose Jack Hardware raises its price to $8.00 per pound of screws. As a result, it now sells 5 pounds of screws. Use the blue rectangle to draw the area that corresponds to the new price and quantity. Did raising the price of screws increase Jack Hardware’s revenue? Yes No
Explanation / Answer
Revenue = price * quantity
When price =$5.00 per pound and quantity= 8 pounds=> Revenue = $5*8 =$40
When price = $8.00 per pound and quantity= 5 pounds => Revenue =$8*5 = $40
Thus, there is no change in revenue as with the increase in price, quantity has decreased.
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