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.