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.
d
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According to the shortsightedness effect, politicians tend to favor projects with
a. short-run benefits and short-run costs. b. short-run benefits and long-run costs. c. long-run benefits and short-run costs. d. long-run benefits and long-run costs.
Which of the following statements about market economies is correct?
a. In a market economy, no one is looking out for the economic well-being of society as a whole. b. Market economies are characterized by decentralized decision making and self-interested decision makers. c. Market economies have proven remarkably successful in promoting overall economic well-being. d. All of the above are correct.