If marginal revenue equals zero,then demand at this level of output is
A)perfectly inelastic.
B)inelastic.
C)unit elastic.
D)elastic.
E)perfectly elastic.

Question

Quizplus · Accepted Answer

When marginal revenue is zero, it means that the last unit produced did not generate any additional revenue. This indicates that the total revenue is maximized at this level of output. At this point, the demand is unit elastic because a change in price will result in an equal percentage change in quantity demanded, which ensures that total revenue remains constant. This is known as the unit elastic point of demand.

If Marginal Revenue Equals Zero,then Demand at This Level of Output