The MR curve of a monopoly firm is given by the equation of MR= 20 -4q. At what level of output is the elasticity of demand equal to 1?

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Solution

The correct option is B
5

The elasticity of demand equal to one when the total revenue is maximized i.e. when MR=0.
Equating MR to 0, we get, 20 - 4q=0
i.e. 4q =20 or q=5.

Hence elasticity of demand is equal to 1 at an output level of 5.

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The MR curve of a monopoly firm is given by the equation of MR= 20 -4q. At what level of output is the elasticity of demand equal to 1?

The correct option is B 5 The elasticity of demand equal to one when the total revenue is maximized i.e. when MR=0. Equating MR to 0, we get, 20 - 4q=0 i.e. 4q =20 or q=5. Hence elasticity of demand is equal to 1 at an output level of 5.

The correct option is B
5

The elasticity of demand equal to one when the total revenue is maximized i.e. when MR=0.
Equating MR to 0, we get, 20 - 4q=0
i.e. 4q =20 or q=5.

Hence elasticity of demand is equal to 1 at an output level of 5.