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

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[{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.

Answer and Explanation: 1

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.


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Price Elasticity of Demand: Definition, Formula & Example

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Chapter 3 / Lesson 54

Learn what price elasticity is. Discover how to find price elasticity of demand, study examples of price elasticity, and examine a price elasticity graph.


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