Lesson 7 Flashcards
1
Q
- total revenue
A
the revenue received by a firm from its sales of a good or service it is the quantity sold, multiplied by the price
TR=Q_0×P_0
2
Q
- average revenue
A
the average revenue received by the firm per unit of output; it is total revenue divided by the quantity sold
AR= TR/Q_0
3
Q
- marginal revenue
A
the additional revenue received by the firm if it sells an additional unit of output
4
Q
- D = AR because
A
the average revenue that a firm receives for a given number of sales is equal to the price that leads to those sales
