A Firm Derives Revenue from Two Sources: Goods X and Y.Annual

Multiple Choice

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