Cost And Revenue Curves Flashcards
1
Q
Define Total Revenue
A
Price x Quantity
2
Q
Define Average Revenue
A
Revenue per unit
Total Revenue/Quantity
3
Q
Define Marginal Revenue
A
The additional revenue that will be generated by increasing product sales by one unit
Change in TR/ Change in Q
4
Q
Define Total Cost
A
Cost x Quantity
5
Q
Define Average Cost
A
The cost per unit
Total Cost/Quantity
6
Q
Define Marginal Cost
A
The additional cost of producing one extra unit
Change in Total Cost/Change in Q
7
Q
What are the 3 business objectives
A
Profit maximisation
Sales maximisation
Revenue maximisation
8
Q
When does profit maximisation occur?
A
When MR=MC
9
Q
When does sales maximisation occur?
A
When AR=AC
10
Q
When does Revenue Maximisation occur?
A
When MR=0
