Final answer:
The tradeoff between a replacement effect and an efficiency effect does not involve deciding between drastic innovation and process innovation.
Step-by-step explanation:
The statement is false. The tradeoff between a replacement effect and an efficiency effect in monopolies does not specifically involve deciding between drastic innovation and process innovation. The tradeoff between a replacement effect and an efficiency effect refers to the impact on consumer welfare that occurs when a monopolist introduces a new product or improves an existing one. A replacement effect occurs when consumers switch from buying an existing product to buying the new or improved product, resulting in higher consumer welfare. An efficiency effect occurs when the cost of producing the new or improved product decreases, allowing the monopolist to produce more units at lower prices, also resulting in higher consumer welfare.