Marginal revenue equals zero at which point on the monopolist's demand curve?
A) The elastic portion.
B) The unitary elastic point.
C) The inelastic portion.
D) Where demand equals zero.

Question

Marginal revenue equals zero at which point on the monopolist's demand curve? ​
A) ​The elastic portion.
B) ​The unitary elastic point.
C) ​The inelastic portion.
D) ​Where demand equals zero.

Quizplus · Accepted Answer

Marginal revenue equals zero at the point of unitary elasticity on a monopolist's demand curve. This is because at this point, the price increase from selling one more unit is exactly offset by the decrease in quantity sold due to the higher price, resulting in no change in total revenue.

Marginal Revenue Equals Zero at Which Point on the Monopolist's