Q105
When marginal revenue is zero, total revenue is
A.
Maximum
AnswerB.
Minimum
C.
Zero
D.
Decreasing
Answer: Option A
Solution
Answer: Option A
Solution:
When marginal revenue is zero, total revenue is Maximum. The profit maximizing quantity and price can be determined by setting marginal revenue equal to zero, which occurs at the maximal level of output. Marginal revenue equals zero when the total revenue curve has reached its maximum value.