-Consider the straight-line demand curve illustrated in the above figure. At what price is total revenue maximized?
A) at a price of $8
B) at a price of $6
C) at a price of $4
D) More information is needed to determine the price at which total revenue is maximized.

Question

-Consider the straight-line demand curve illustrated in the above figure. At what price is total revenue maximized?
A) at a price of $8 
B) at a price of $6 
C) at a price of $4 
D) More information is needed to determine the price at which total revenue is maximized.

Quizplus · Accepted Answer

Total revenue is maximized at the midpoint of a linear demand curve, where the price elasticity of demand is unitary.

-Consider the Straight-Line Demand Curve Illustrated in the Above Figure