When the elasticity of demand is unity, the Marginal revenue is _____.

Zero

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positive

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negative

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either negative or zero

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Solution

The correct option is A Zero
When the elasticity of demand is unity, the Marginal revenue is zero. Thus because of marginal revenue which is zero, the elasticity of demand is one, this means the proportionate change in quantity demand is equal to the proportionate change in price.

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