Suppose That Product X Is Sold by a Monopolist Who

Multiple Choice

Suppose that product X is sold by a monopolist who has constant marginal cost for producing X. Further suppose that there is an exogenous shock to the product X market, resulting in an increase in demand for X and a resulting rightward shift in marginal revenue. Which of the following statements is correct regarding the equilibrium price and quantity of X?

A) Both price and quantity will rise.
B) Both price and quantity will fall.
C) Price will rise; the effect on quantity is uncertain.
D) Quantity will rise; the effect on price is uncertain.