Ayushi Asked a Question
September 8, 2020 7:08 pmpts 30 pts
If the demand curve is linear (straight line), it has a unitary elasticity at the midpoint. The total revenue is maximum at this point. PLEASE EXPLAIN THIS - "THE TOTAL REVENUE IS MAXIMUM AT THIS POINT".
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  • Nidhi taparia Best Answer
    Also, I would like to thank you Ayushi. Last month I received the award for Best Tutor for answering maximum questions. It's only because of learners like you :) Keep asking and I'...
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    Ayushi
    Congratulations!! You're most welcome.
  • Nidhi taparia thankyou
    This topic is based on the relationship between AR, MR and elasticity. We should know that demand curve is actually the AR curve. When AR curve is unitary elasticity, MR curve int...
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    Ayushi
    why the MR curve will touch the x axis ? does it coincides with AR curve ? if yes then why
  • Nidhi taparia
    The MR curve touches x axis means Marginal Revenue or the additional revenue from this unit of the commodity has become zero.
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  • Nidhi taparia
    No, the MR curve never intersects AR curve, except in 2 cases - One, in perfect competition when AR = MR at every unit of the good. Two, in imperfect competition when 0 units are s...
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