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Year 2 - Micro > 3.3.1 Revenue > Flashcards

3.3.1 Revenue Flashcards

1
Q

Total Revenue Definition and Formula

A

The total value of all sales a firm incurs
TR=P x Q

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2
Q

Average Revenue Definition and Formula

A

Overall revenue per unit
AR=TR/Q

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3
Q

Marginal Revenue Definition and Formula

A

Extra revenue received from the sale of an additional unit of output
MR=△TR/△Q

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4
Q

Total revenue rule

A

In order to Rev Max, firms increase the price of products that are inelastic in demand/decrease prices on products that are elastic in demand

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Year 2 - Micro (16 decks)

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