Which Statement Best Describes the Effect(s) That Occur When a Monopoly

question 403

Multiple Choice

Which statement best describes the effect(s) that occur when a monopoly firm reduces the price of its product?

• A)The "price effect" causes total revenue to fall.
• B)The "output effect" causes total revenue to rise.
• C)The "revenue effect" causes total revenue to remain constant.
• D)Both a and b are correct.

---

Definitions:

Abraham Maslow's

Abraham Maslow's work in psychology emphasized the importance of focusing on the positive qualities in people, as opposed to treating them as a 'bag of symptoms'.

Hierarchy of Needs

A motivational theory in psychology proposed by Abraham Maslow, suggesting that people are motivated to fulfill basic needs before moving on to other, more advanced needs, culminating in self-actualization.

Physiological

Relating to the functions and activities of living organisms and their parts, including all physical and chemical processes.

Self-Actualization

The realization or fulfillment of one's talents and potentialities, often seen as the highest need in Maslow's hierarchy of needs.