Which of the following statements is true?
A) The demand for tobacco products tends to be elastic.
B) Total revenue is maximized when price elasticity of demand is one.
C) Goods are said to be price inelastic when the elasticity is greater than two.
D) The demand for milk is more elastic than the demand for luxury travel cruises.
E) The demand for 5-cent candy is more elastic than the demand for Irish lace tablecloths.

Question

Quizplus · Accepted Answer

Total revenue is maximized at the point where price elasticity of demand equals one, indicating a unitary elasticity. At this point, the percentage change in quantity demanded is exactly equal to the percentage change in price, leading to maximum total revenue.

Which of the Following Statements Is True