Use the following to answer question(s): Demand, Elasticity, and Total Revenue

-(Exhibit: Demand, Elasticity, and Total Revenue) At point G in Panel (b), which of the following is (are) true?
A) Profit is maximized.
B) To maximize profit, the firm should not produce any more or less.
C) The quantity is the same as the quantity when MR = 0.
D) All of the above are true.

Question

Use the following to answer question(s): Demand, Elasticity, and Total Revenue
 
-(Exhibit: Demand, Elasticity, and Total Revenue) At point G in Panel (b), which of the following is (are) true?
A) Profit is maximized. 
B) To maximize profit, the firm should not produce any more or less. 
C) The quantity is the same as the quantity when MR = 0. 
D) All of the above are true.

Quizplus · Accepted Answer

At point G, the quantity corresponds to when marginal revenue (MR) is zero, which is typically where total revenue is maximized, not necessarily profit. Profit maximization occurs where marginal cost equals marginal revenue, not necessarily where MR = 0.

Use the Following to Answer Question(s): Demand, Elasticity, and Total