When MR is zero the elasticity of demand on AR curve is _______.

e < 1 and TR is maximum

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e = 1 and TR is maximum

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e > 1 and TR is rising

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none of these

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Solution

The correct option is A e < 1 and TR is maximum
If the marginal revenue is zero as the total revenue reaches its maximum at this point, the elasticity of demand on average revenue curve is less than one(e<1) then it denotes that the change in average revenue due to a unit change in the price of the output for which it is sold in less than one.

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Similar questions

M R = 0, T R

Comment on the shape of the MR curve in case the TR curve is a

T_{r}

E = k (T - T_{r}) [T_{0} - \frac{1}{2} (T + T_{r})]

T = \frac{1}{2} T_{0}

The TR curve of a monopoly firm is given by the equation
$T R = - q^{2} + 12 q - 20$ , where TR is in millions of dollars.

What is the maximum revenue of the firm?

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