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?

If the company lowers the selling price, the revenues will decrease by $100,000.

Explanation:

Giving the following information:

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.

Actual revenue= 350,000*20= $7,000,000

New revenue= 300,000*23= $690,000

If the company lowers the selling price, the revenues will decrease by $100,000.

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