When total revenue reaches its peak (elasticity equals 1),marginal revenue reaches
A)1)
B)zero.
C)-1.
D)Cannot be determined from the information provided

Question

Quizplus · Accepted Answer

When total revenue is at its peak, marginal revenue must be equal to zero. This is because any increase in production beyond the point of peak revenue will result in a decrease in revenue, meaning the marginal revenue curve must slope downwards. At the point of zero slope (i.e. the peak of the total revenue curve), marginal revenue must be equal to zero.

When Total Revenue Reaches Its Peak (Elasticity Equals 1),marginal Revenue