Assume the demand curve for t-shirts is Q = 180

Question

Assume the demand curve for t-shirts is Q = 180 - 15P or P = 12 - .0667 Q. When are total revenues maximized?
A) When the price is $3.00.
B) When the price is $6.00.
C) When the price is $8.00.
D) When the price is $6.66

Quizplus · Accepted Answer

Total revenue is maximized at the midpoint of the linear demand curve, which occurs when the price is $6.00, as this is the midpoint of the price range from $0 to $12.