Consider a downward-sloping demand curve. When the price of an ...

[bobbie]

Consider a downward-sloping demand curve. When the price of an inferior good decreases, the income and substitution effects
 
  A) work in the same direction to increase quantity demanded.
  B) work in the same direction to decrease quantity demanded.
  C) work in opposite directions and quantity demanded increases.
  D) work in opposite directions and quantity demanded decreases.

Question 2

When a monopolistically competitive firm cuts its price to increase its sales, it experiences a gain in revenue due to the
 
  A) output effect. B) substitution effect. C) income effect. D) price effect.

[Rilsmarie951]

Answer to Question 1

C

Answer to Question 2

A

[bobbie]

Thanks for the timely response, appreciate it

[xiaomengxian]

Wow, this really help