Sally's Ski Shoppe maximizes total revenue when the price elasticity of demand for skis is
A)greater than 10.
B)greater than 1 but less than 10.
C)zero.
D)1.
E)-1.

Question

Quizplus · Accepted Answer

Total revenue is maximized when the price elasticity of demand is equal to 1, indicating a unit elastic demand where the percentage change in quantity demanded is exactly equal to the percentage change in price.

Sally's Ski Shoppe Maximizes Total Revenue When the Price Elasticity