Question

Wendy has a monopoly in the retailing of motor homes. She can sell five per week at $21,000 each. If she wants to sell six, she must charge $20,000 each. The quantity effect of selling the sixth motor home is:Choose one answer.
a. $21,000.
b. $15,000.
c. $10,000.
d. $20,000.

Answer 1

Answer:

The correct option is option d, $20,000.

Explanation:

As she has to sell all the six, she has to charge each house for $20,000. This indicates that the quantity effect of selling the sixth motor home is given as

the cost of the sixth house which is $20,000 so the correct answer is $20,000.