Consider a single-price monopoly. Which of the following is statements is correct? Explain your answer.
a. As long as the demand curve facing a monopoly is downward sloping, downward shifts in MC will prompt the monopoly to increase output and reduce price.
b. As long as the demand curve facing a monopoly is downward sloping, downward shifts in MC will prompt the monopoly to reduce output and thereby obtain a higher price.
c. As long as the demand curve facing a monopoly is downward sloping, upward shifts in MC will prompt the monopoly to increase output and reduce price.
d. None of the above.