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

Question

Quizplus · Accepted Answer

Total revenue (TR) is calculated by multiplying price (P) by quantity (Q). On a linear demand curve, the highest prices are located at the top of the curve and the highest quantity demanded is located at the low end of the curve. Therefore, choosing A or C would result in a lower total revenue compared to choosing B, the midpoint of the curve, which maximizes the combination of both price and quantity demanded. Hence, on a linear demand curve, total revenue will be at its largest value at the midpoint of the curve (B).

Total Revenue Will Be at Its Largest Value on a Linear