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If a Monopolistically Competitive Firm Lowers Its Price And, as a Result

Question 30

Multiple Choice

If a monopolistically competitive firm lowers its price and, as a result, its total revenue decreases then


A) the output effect of the price change was less than the price effect.
B) the output effect of the price change was greater than the price effect.
C) the firm's demand curve must have decreased.
D) the substitution effect of the price change was greater than the income effect.

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