Question

If the demand for a good is in the elastic range of its demand curve:

a) MR = MC
b) MR > 0
c) MR < 0
d) MR = 0

Answer 1

In the elastic range of a demand curve, the marginal revenue will be zero.

Step-by-step explanation:

In the elastic range of a demand curve, the price elasticity of demand is greater than 1, indicating that the quantity demanded is highly responsive to changes in price. In this case, the answer is (d) MR = 0. When the demand is elastic, the marginal revenue (MR) will be zero. This occurs because an increase in price will cause a decrease in quantity demanded, leading to a decrease in total revenue. Therefore, the marginal revenue will be zero in the elastic range of the demand curve.