Panels (a) and (b) show that: when a demand curve is downward sloping, P < MR. O a firm will never maximize profits by producing a quantity where the demand curve is in the inelastic range. when TR is at a maximum, marginal revenue is negative. all of the above are true.

Panels (a) and (b) show that: when a demand curve is downward sloping, P < MR. O a firm will never maximize profits by producing a quantity where the demand curve is in the inelastic range. when TR is at a maximum, marginal revenue is negative. all of the above are true.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Exhibit: Demand, Elasticity, and Total Revenue
Price per unit
P
Panel (a)
Demand curve
Curve C
Point A
Quantity per period
Panels (a) and (b) show that:
Dollars
MO
Panel (b)
Q
Quantity per period
M
O when TR is at a maximum, marginal revenue is negative.
all of the above are true.
Total revenue cruve
when a demand curve is downward sloping, P < MR.
a firm will never maximize profits by producing a quantity where the demand curve is in the inelastic
range.

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