What is the additional revenue in a strong economy if expanding to larger dogs?

• A. $16,000
• B. $20,000
• C. $22,000
• D. $24,000

Answer: (C)

The idea being tested is how much extra revenue you gain when you expand to a new market segment in a strong economy. In this setup, adding larger-dog products increases both the number of units sold (incremental demand) and, often, the price you can charge (premium for larger dogs). So the additional revenue is basically the incremental quantity sold multiplied by the price per unit (or price premium).

The figure 22,000 fits the scenario because it reflects that combination of more units and a solid price per unit in a strong economy. If you picture it as incremental demand around a certain number of extra units and a price point that yields about $40 per unit, you’d get roughly 550 extra units times $40, which equals 22,000. The other options correspond to different, plausible mixes (fewer extra units or a different price), but they don’t align with the problem’s given data and the expected scale of the expansion in a strong economy.