3.3.1 Revenue Flashcards
1
Q
What is total revenue?
A
Price multiplied by the quantity sold
2
Q
What is average revenue?
A
The average revenue gained per unit sold. It is calculated by total revenue / quantity sold
3
Q
What is the AR curve and what does it show?
A
The average revenue, it is also equilivent to the price of the good. At lower levels of price AR is higher, it also represents the Demand curve
4
Q
What is marginal revenue?
A
The extra gained revenue from the sale of one extra unit.
5
Q
When is marginal revenue maximised?
A
When it is 0
6
Q
What occurs to TR when MR = 0?
A
TR revenue would start to fall because it is the point when PED = 1.
