Given a linear demand curve, we would expect that as we move down the curve from left to right that:
A) total revenue will fall throughout.
B) total revenue will rise throughout.
C) total revenue will change depending on the price elasticity, which changes along the curve.
D) total revenue will equal zero at the midpoint of the curve.

Question

Quizplus · Accepted Answer

Total revenue changes along a linear demand curve because the price elasticity of demand changes at different points along the curve. Initially, demand is relatively elastic, and total revenue increases as price decreases. However, as we move further down the curve, demand becomes relatively inelastic, and total revenue decreases with a decrease in price.

Given a Linear Demand Curve, We Would Expect That as We