7) revenue MR AR TR

Question 1

What is revenue?

Answer 1

Money made by sales by businesses

Question 2

Total revenue equation

Answer 2

P X Q

Question 3

Average revenue equation

Answer 3

TR/Q

Question 4

What is average revenue equal to?

Answer 4

Price

Question 5

Marginal revenue equation

Answer 5

Change in TR/ change in Q

Question 6

What are the characteristics of perfect completion?

Answer 6

Many buyers and sellers

Selling homogenous products

Firms are price takers

No barriers to entry

Perfect knowledge

Question 7

What is the marginal revenue?

Answer 7

The additional revenue generated when we sell more output

Question 8

What are the features of imperfect competition?

Answer 8

Few buyers and sellers

Firms are price makers

Differentiated products

High barriers to entry

Imperfect information

Question 9

What does the AR curve =

Answer 9

Demand

Question 10

When will TR hit its peak?

Answer 10

When marginal revenue is 0

Because once MR is negative total revenue starts to fall

Question 11

When will TR always rise?

Answer 11

When the MR is positive