When a Monopoly Increases Its Output and Sales

question 527

Multiple Choice

When a monopoly increases its output and sales,

• A)both the output effect and the price effect work to increase total revenue.
• B)the output effect works to increase total revenue, and the price effect works to decrease total revenue.
• C)the output effect works to decrease total revenue, and the price effect works to increase total revenue.
• D)both the output effect and the price effect work to decrease total revenue.

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Definitions:

Profits

The financial gains obtained after subtracting all expenses, taxes, and costs from the revenue generated by a business or investment.