When a monopolist increases the number of units it sells,there are two effects on revenue.What are they
A)the demand effect and the supply effect
B)the competition effect and the cost effect
C)the income effect and the monopoly effect
D)the output effect and the price effect

Question

Quizplus · Accepted Answer

The two effects on revenue when a monopolist increases the number of units it sells are the output effect and the price effect. The output effect refers to the increase in revenue that comes from selling more units, while the price effect refers to the decrease in revenue that results from lowering the price in order to sell those additional units. Together, these effects determine whether or not an increase in output will result in an increase in total revenue for the monopolist.

When a Monopolist Increases the Number of Units It Sells,there