Total revenue will be at its largest value on a linear demand curve at the
A)top of the curve,where prices are highest.
B)midpoint of the curve.
C)low end of the curve,where quantity demanded is highest.
D)None of the above is correct.

Question

Quizplus · Accepted Answer

Total revenue is calculated by multiplying the price by the quantity demanded. At the top of the curve (choice A), prices are high but quantity demanded is low, resulting in a smaller total revenue than at the midpoint. At the low end of the curve (choice C), quantity demanded is high but prices are low, resulting in a smaller total revenue than at the midpoint. Therefore, the midpoint of the demand curve is where total revenue is at its largest value.

Total Revenue Will Be at Its Largest Value on a Linear