Allegiant Air holds a natural monopoly on most of the routes it serves in the United States.Allegiant Air's marginal revenue will ________ when its total revenue ________.
A) equal $0; is maximized
B) be negative; is maximized
C) be positive; is maximized
D) inelastic; is increasing
E) elastic; is increasing

Question

Quizplus · Accepted Answer

When total revenue is maximized, marginal revenue equals $0. This is because any additional unit sold would not increase total revenue, indicating the peak point of revenue generation.

Allegiant Air Holds a Natural Monopoly on Most of the Routes