Along a linear demand curve,total revenue is maximized:
A) where the slope of a line from the origin to the demand curve is equal to the elasticity.
B) where the elasticity is -1.
C) near the quantity axis intercept.
D) near the price axis intercept.
E) where the elasticity is 0.

Question

Quizplus · Accepted Answer

Total revenue is maximized at the point on the demand curve where price elasticity of demand is equal to -1, indicating unit elasticity. At this point, the percentage change in quantity demanded equals the percentage change in price, optimizing revenue.

Along a Linear Demand Curve,total Revenue Is Maximized