PRC-3 · Chapter 12 · Question 60 of 69
For a firm operating with a downward-sloping demand curve, its Total Revenue (TR) reaches its absolute mathematical maximum exactly when:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Marginal Revenue is zero
Explanation
When marginal revenue hits zero, it means selling one more unit adds absolutely nothing to total revenue, indicating TR has hit its peak.
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