Micro A2 - Revenue Flashcards
1
Q
Revenue Formula for Total Revenue
A
Total revenue = quantity x price
2
Q
What is Perfect Competition
A
Where many firms offer a homogenous product. There is freedom of entry & exit as well as perfect information. Firms will normal profit and prices will be kept low because of competitive pressures
3
Q
What is Imperfect Competition
A
4
Q
Price elasticity of demand (PED)
A
The responsiveness of a quantity of demand to a change in price.
% change in quantity demanded / % change in price
5
Q
Average Revenue formula
A
Average revenue = total revenue / total amount of output
6
Q
Marginal Revenue formula
A
Marginal revenue = change in total revenue / change in output
