The quantity effect of a price reduction causes a(n)________.
A) decrease in revenue due to a lower price
B) increase in revenue due to increased sales
C) increase in labor demand due to increased sales of the product
D) decrease in labor demand due to a lower price of the final product

Question

Quizplus · Accepted Answer

The quantity effect of a price reduction refers to the increase in sales that occurs when the price of a product is lowered. This leads to an increase in revenue, as more units are sold at the lower price. Therefore, choice B is the best answer. Choices A, C, and D are not directly related to the quantity effect of a price reduction.

The Quantity Effect of a Price Reduction Causes A(n)________