W A small-town monopolist determines that lowering prices will bring in more customers. Following the price drop, however, the firm discovers that even though the number of customers increased as hoped, the firm's total profit is falling. What could have gone wrong? Correct Answer(s) X Drag appropriate answer(s) here With the increase in customers, MR is now greater than MC. The new price and output level are at a point where MRMC. + + At lower price levels, demand is very elastic, so the price effect is minimized. The loss in revenue due to the price effect exceeds the gain in revenue due to the output effect. + + Drag appropriate answer(s) here Incorrect Answer(s) # E D F5 10 Q Search F8 00 * 80 F10 I H. N M