If a firm seeks to maximize total revenue, it should produce at the quantity where:
A)marginal revenue equals zero.
B)elasticity of demand is less than one.
C)elasticity of demand is greater than one.
D)marginal revenue is maximized.
E)marginal cost equals average revenue.

Question

Quizplus · Accepted Answer

To maximize total revenue, a firm should produce at the quantity where marginal revenue equals zero. This is because, at this point, any additional unit sold would not increase total revenue, indicating the revenue-maximizing level of output.

If a Firm Seeks to Maximize Total Revenue, It Should