47) Revenue Flashcards
1
Q
Why does D = AR?
A
The demand curve shows the quantity demanded at each price. The AR curve shows the average amount of money coming into the firm as a result of a sale (the price it charges)
2
Q
What is the relationship between revenue and elasticity?
A
For inelastic goods, a P increase will increase TR and a P decrease will decrease TR
For elastic goods, a P increase will decrease TR and a P decrease will increase TR
3
Q
AR definition
A
The average receipts per unit sold
4
Q
MR definition
A
The addition to total revenue of an extra unit sold
5
Q
TR definition
A
The total money received from the sale of any given quantity of output
