Figure 4.2
-In Figure 4.2 at quantities at Q₁
A) price and total revenue are unrelated.
B) total revenue is maximized.
C) price elasticity equals 1.
D) all of the above

Question

Figure 4.2
-In Figure 4.2 at quantities at Q₁
A) price and total revenue are unrelated. 
B) total revenue is maximized. 
C) price elasticity equals 1. 
D) all of the above

Quizplus · Accepted Answer

At Q₁, total revenue is maximized because marginal revenue is zero. Price elasticity equals 1 because the percentage change in quantity demanded is equal to the percentage change in price.

Figure 4.2 -In Figure 4.2 at Quantities at Q₁