A firm derives revenue from two sources: goods X and Y. Annual revenues from good X and Y are $10,000 and $20,000, respectively. If the price elasticity of demand for good X is ?2.0 and the cross-price elasticity of demand between Y and X is 1.5, then a 4 percent increase in the price of X will:

A. increase total revenues from X and Y by $400.
B. increase total revenues from X and Y by $800.
C. decrease total revenues from X and Y by $400.
D. increase total revenues from X and Y by $8,000.


Answer: B

Economics

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