explain why revenue is maximized when price elasticity of demand is 1 (one)?
I have searched about this, and it seems to me that at unity elastic demand as the price change there will be the same percentage change in demand thus the revenue will not change, so how the above question asking this question
regards
We know Total revenue is maximised when marginal revenue is zero
and we also know marginal revenue curve slopes downward at the twice rate compared to demand(Avwrage revenue) curve
Thus marginal revenue is zero at the mid point of Average revenue quantity. And we know at the midpoint of average revenue or demand curve elasticity of demand is 1.
explain why revenue is maximized when price elasticity of demand is 1 (one)? I have searched...
Why profit maximized when demand is elastic and revenue is maximized when demand is unit elastic leading the price of profit-maximizing higher than revenue-maximizing? Explain your answer by a graph.
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