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A real estate developer is offering identical houses for sale for $350,000 each, and has 20 willing customers. The developer is considering lowering the price to $300,000, since at that price there would be an additional 3 customers willing to purchase houses. What would be the developer’s change in revenue from lowering the price in this way?

User Dampier
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1 Answer

3 votes

Answer: $100,000 less

Step-by-step explanation:

Since we are informed from the question that the real estate developer is offering identical houses for sale for $350,000 each, and has 20 willing customers, this means that current revenue will be:

= $350,000 × 20

= $7,000,000

By lowering the price, the revenue made will be:

= $300,000 × 23

= $6,900,000

The difference is

$7,000,000 - $6,900,000

= $100,000 less.

User Pablote
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