Question

suppose that glitter gulch, a gold mining firm, increased its sales revenues on newly mined gold from $100 million to $200 million between one year and the next.

Answer 1

With a 100 percent over the same period, change in real output is $0 million

With a 0 percent increase in price, the change in real output is $100 million.

What is the expected revenue based on 100% increase?

The expected revenue based on the 100% increase in price of mined gold is $200 million, which means that if the actual revenue is $200 million, then it means the real output change is $0.

However, if there was no 0% change in price of newly mined gold, then the real output change is the excess of the next year forecast sales revenue over the current year actual sales revenue which is $100 million($200 million-$100 million)

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Full question:

Suppose that Glitter Gulch, a gold mining firm, increased its sales revenues on newly mined gold from $100 million to $200 million between one year and the next. Assuming that the price of gold increased by 100 percent over the same period, by what numerical amount did Glitter Gulch’s real output change? If the price of gold had not changed, what would have been the change in Glitter Gulch’s real output