Along a downward-sloping linear demand curve, total revenue is greatest if demand is
A)inelastic
B)elastic
C)inelastic when prices are high
D)elastic when prices are high
E)unit elastic

Question

Quizplus · Accepted Answer

Total revenue is maximized when demand is unit elastic because the percentage change in quantity demanded equals the percentage change in price, resulting in no change in total revenue.

Along a Downward-Sloping Linear Demand Curve, Total Revenue Is Greatest