When a monopolist increases output,total revenue:
A)will increase if the price effect outweighs the quantity effect.
B)will decrease if the quantity effect outweighs the price effect.
C)will increase if the quantity effect outweighs the price effect.
D)None of these statements is true.

Question

Quizplus · Accepted Answer

In a monopoly, total revenue increases when the quantity effect (additional revenue from selling more units) outweighs the price effect (loss of revenue from lowering the price on all units sold).

When a Monopolist Increases Output,total Revenue