# What price maximizes the firm's total revenues? What is the elasticity of demand at this point on...

## Question:

[{Image src='diagram1863399545121985738.png' alt='' caption=''}] What price maximizes the firm's total revenues? What is the elasticity of demand at this point on the demand curve?

## Elasticity of Demand

The revneue of a product is equal to price times the number of units sold. The revenue has a close relationship with the price elasticity of demand.

The revneue is maximized at both $8 and$6 with the revenue at these prices being equal to \$24.

At the price at which revenue is maximized the demand is always unit elastic.