Question

Question 14 Output Marginal Cost 1,200 1,300 1,400 1,500 1,600 Total Revenue 7,500 9,000 10,500 12,000 13,500 Reference: Ref 8-1 (Table) In the table, what is the shape of the demand curve that faces John's Tricycle Company? A. horizontal B. downward sloping C. upward sloping D. vertical

Answer 1

The correct option is A.) Horizontal

Output Total Revenue Price

5 7500 1500

6 9000 1500

7 10500 1500

8 12000 1500

9 13500 1500

Total Revenue = Price* Output

Price= Total Revenue/ Output

Demand Curve is graphical representation of relationship between Price and Output.

Y-axis Denotes Price.

X-axis Denoted Output.

As Price is constant, Quantity is increasing. It means that the Demand curve is Horizontal.