A firm facing a linear demand curve maximizes its total revenue where demand is
A)perfectly inelastic.
B)inelastic.
C)elastic.
D)unitary elastic.

Question

Quizplus · Accepted Answer

A firm maximizes its total revenue at the point where demand is unitary elastic because at this point, the percentage change in quantity demanded is equal to the percentage change in price, resulting in no change in total revenue.

A Firm Facing a Linear Demand Curve Maximizes Its Total