Along a downward-sloping, straight-line demand curve, total revenue is greatest where demand is
A)inelastic.
B)perfectly inelastic.
C)perfectly elastic.
D)elastic.
E)unit elastic.

Question

Quizplus · Accepted Answer

Total revenue is greatest at the point where demand is unit elastic, meaning the percentage change in quantity demanded equals the percentage change in price. This is because, at this point, the increase or decrease in price is exactly offset by the increase or decrease in quantity demanded, maximizing total revenue.

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