Exhibit 5.5

-Refer to Exhibit 5.5,which shows the total revenue curve for a firm.Which of the following statements is true at a quantity of 10?
A)Demand is elastic.
B)Demand is inelastic.
C)Demand is unit elastic.
D)Demand is perfectly inelastic.
E)Demand is perfectly elastic.

Question

Exhibit 5.5
 
-Refer to Exhibit 5.5,which shows the total revenue curve for a firm.Which of the following statements is true at a quantity of 10?
A)Demand is elastic. 
B)Demand is inelastic. 
C)Demand is unit elastic. 
D)Demand is perfectly inelastic. 
E)Demand is perfectly elastic.

Quizplus · Accepted Answer

At a quantity of 10, the total revenue curve is at its peak, indicating that a small change in price would lead to a proportional change in quantity demanded, which is the definition of unit elasticity.

Exhibit 5.5 -Refer to Exhibit 5.5,which Shows the Total Revenue Curve for Total