Consumer surplus increases as the price of a good decreases.

Refer to the above figure. If the MPC is unchanged and level of autonomous consumption increases, what occurs?

A) Line EBD will shift up. B) Line ABC will drop down. C) Line ABC shifts up. D) Line EBD rotates and becomes steeper.

Each firm knows where its MR = MC output level is located

Indicate whether the statement is true or false