For a monopoly, when the price effect outweighs the quantity effect of increased production:
A)total revenue will increase.
B)demand must be price inelastic.
C)marginal revenue must be increasing.
D)All of these are true.

Question

Quizplus · Accepted Answer

When the price effect outweighs the quantity effect of increased production in a monopoly, it means that the decrease in price needed to sell one more unit reduces total revenue more than the additional unit increases it, which occurs when demand is price inelastic.

For a Monopoly, When the Price Effect Outweighs the Quantity