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Economics A Level

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Question:

Where would TR be Maximised in a Down-sloping Demand Curve?

Author: go kys



Answer:

-TR is Maxed when the PED = -1. In the Demand Curve, there will be a Point on it (usually the middle) where there is Maximum Revenue. This is when PED = -1 (or 1) This makes sense - when the Demand is Elastic, the Price is often too high so less Consumption (eg) -Also, TR iis Max when MR is = to 0. This thus means that the Monopolist Firm has reached a Point where selling more becomes Pointless


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go kys
go kys