Total revenue is maximized when marginal revenue equals marginal cost which is when the own price elasticity of demand is equal to one.
Profit is maximised when marginal revenue is equal to marginal cost. Marginal revenue is the change in total revenue when output increases by one unit. Marginal cost is the change in total cost when output increases by one unit.
Unit price elasticity of demand is when the percentage change in quantity demanded divided by the percentage change in price is equal to 1. When price elasticity of demand is equal to 1, profit is maximised.
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