Royal Hardware sold 8 pounds of screws yesterday at a price of $2 per pound. Thi

Question

Royal Hardware sold 8 pounds of screws yesterday at a price of $2 per pound. This point is represented by the black X on the diagram below, which plots the price of screws (measured in dollars per pound) and the quantity sold (measured in 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 are small squares in the purple shaded rectangle. On this graph, the area of the purple rectangle corresponds to: The price of the screws, measured in dollars per pound Royal Hardware's revenue from selling screws, measured in dollars The number of screws that Royal Hardware sold, measured in pounds None of these-the area has no meaning Now suppose Royal Hardware raises its price to $3 per pound of screws. As a result, it sells only 4 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 Royal Hardware's revenue? No Yes

Explanation / Answer

All the answers you have here, are correct EXCEPT THE LAST PART.

The last question in detail:

When Price = $2 and quantity = 8, Revenue = Price x Quantity = $2 x 8 = $16

When Price = $3 and quantity = 4, Revenue = Price x Quantity = $3 x 8 = $12

So, when Price increased to $4, revenue DID NOT increase.

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