Final answer:
Total revenue on a linear demand curve is largest at the midpoint of the curve. This is where the price and quantity demanded combine to yield the highest total revenue, typically around the quantities 6 or 7 in the given example.
Step-by-step explanation:
The student has asked about the point on a linear demand curve where total revenue will be at its largest value. Given that a monopolist faces a downward sloping demand curve, it suggests that more output can only be sold by reducing the price, which leads to an interesting relationship between price, quantity demanded, and total revenue. In such a case, total revenue essentially creates a hill-like shape on a graph — increasing, plateauing, and then decreasing again. According to the example provided, which speaks to output levels in simple terms for illustrative purposes, total revenue is highest at the midpoint, specifically at a quantity of 6 or 7.
Therefore, the correct answer to the student question is: b) midpoint of the curve, where both prices and quantity demanded result in the highest total revenue.
A monopolist, however, is not purely focused on maximizing revenue; the ultimate goal is to maximize profits. This typically occurs where total revenue is closest to total costs, minimizing losses or maximizing profits.