Figure 5-8. A demand curve is shown on the graph below. On the graph, Q represents quantity demanded and P represents price.

-Refer to Figure 5-8.The maximum value of total revenue corresponds to a price of
A)$18.
B)$30.
C)$42.
D)$48.

Question

Figure 5-8. A demand curve is shown on the graph below. On the graph, Q represents quantity demanded and P represents price.
 
-Refer to Figure 5-8.The maximum value of total revenue corresponds to a price of
A)$18. 
B)$30. 
C)$42. 
D)$48.

Quizplus · Accepted Answer

The maximum value of total revenue occurs at the point where the demand curve intersects the midpoint of the horizontal axis (i.e. the point of unit elasticity), which in this case is at a price of $30.