When price equals £4, 250 units of a good are demanded, but when the price is reduced to £3, 400 units are demanded. The revenue gained from decreasing the price is _____.

£1000
£200Correct
£500
£1200

Explanation
The increase in revenue is the additional 150 units sold at £3 which equals £450. The fall in revenue is £1 applied over the initial 250 units which equals £250. Hence, the net increase in revenue equals £450 – £250 = £200.