Multiple Choice
Consider the demand curve in the graph shown. Suppose the price is initially $6 and then falls to $4. Which of the following statements is true?
A) The quantity effect will outweigh the price effect, and total revenue will rise.
B) The quantity effect will outweigh the price effect, and total revenue will fall.
C) The price effect will outweigh the quantity effect, and total revenue will rise.
D) The price effect will outweigh the quantity effect, and total revenue will fall.
Correct Answer:
Verified
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