3.3.3 - Revenue Flashcards
1
Q
What is average revenue?
A
Price per unit; total revenue/output.
2
Q
What is marginal revenue?
A
Change in revenue from selling one extra unit of output
3
Q
What is Revenue?
A
The income generated from the sale of output in product markets
4
Q
What is the relationship between average revenue/price per unit and the rate of total revenue increase? (Assuming a downward sloping demand curve)
A
As price per unit decreases, demand expands. until marginal revenue reaches 0, this causes Total Revenue to also increase.
5
Q
What is the relationship between marginal revenue and average revenue?
A
As average revenue decreases, marginal revenue decreases.
