Use the figure below, which shows a linear demand curve and the associated total revenue curve, to answer the questions.

-The marginal revenue of the 700th unit is $_____ and demand is __________ at this point.
A) -20; elastic
B) -20; inelastic
C) 15; elastic
D) 15; inelastic

Question

Use the figure below, which shows a linear demand curve and the associated total revenue curve, to answer the  questions.

-The marginal revenue of the 700th unit is $_____ and demand is __________ at this point.
A) -20; elastic 
B) -20; inelastic 
C) 15; elastic 
D) 15; inelastic

Quizplus · Accepted Answer

The negative marginal revenue of -20 indicates that the demand is inelastic at this point, as reducing the price to sell additional units decreases total revenue.

Use the Figure Below, Which Shows a Linear Demand Curve