Economics 9708 · AS & A Level · Demand and supply curves

Demand and supply curves — practice question

The diagram illustrates the demand curve for a particular good. What conclusion can be drawn from the diagram?

  • AMarginal revenue always has a positive value over the whole range of prices.
  • BMarginal revenue is equal to average revenue at P1.
  • CThe elasticity of demand is constant regardless of the price of the good.
  • DTotal revenue initially increases as price falls from P1, but at some point it will decrease.

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