Figure 5-3

-Refer to Figure 5-3. The maximum value of total revenue corresponds to a price of
A)$20.
B)$50.
C)$70.
D)$100.

Name: Figure 5-3 -Refer to Figure 5-3. The maximum value of total revenue corresponds to a price of A)$20. B)$50. C)$70. D)$100.
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Question

Figure 5-3
  ​
-Refer to Figure 5-3. The maximum value of total revenue corresponds to a price of
A)$20. 
B)$50. 
C)$70. 
D)$100.

Quizplus · Accepted Answer

The maximum value of total revenue occurs at the price where the demand curve is unit elastic. In many cases, this is at the midpoint of a linear demand curve, which often corresponds to a price of $50 in typical textbook examples.

Figure 5-3 ​

Figure 5-3