Figure shows the demand for oil in a country, there is only one firm in the market for oil with monopoly power

Economics Nov 12, 2020

Figure shows the demand for oil in a country, there is only one firm in the market for oil with monopoly power. What will be the change in revenue(in millions) in the firm that decides to decrease its production of oil from Q2 to Q1?

Expert Solution

Computation of Change in Total Revenue:

Total Revenue = Price * Quantity

Total Revenue at Q2 = $80*45 = $3,600

Total Revenue at Q1= $100*30 = $3,000

Change in Total Revenue = $3,000- $3,600 = -$600

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