The figure below shows the demand curve in a monopoly market.

-Refer to the figure above.This monopolist initially produced 6 units and now has a new plan to produce 8 units of this good.The price effect of this plan on the revenue of the monopolist is ________.
A) $3
B) +$6
C) $1
D) +$7

Question

The figure below shows the demand curve in a monopoly market.
 
-Refer to the figure above.This monopolist initially produced 6 units and now has a new plan to produce 8 units of this good.The price effect of this plan on the revenue of the monopolist is ________.
A) $3 
B) +$6 
C) $1 
D) +$7

Quizplus · Accepted Answer

The price effect refers to the change in revenue due to the change in price when the monopolist increases output. If the monopolist produces more, the price typically decreases, leading to a decrease in revenue from the units that were previously sold at a higher price. The correct choice is $3, indicating a decrease in revenue by $3 due to the price effect.

The Figure Below Shows the Demand Curve in a Monopoly