micro revenue Flashcards
1
Q
Define the law of diminishing goods?
A
As the quantity consumed increases , the marginal utility from each unit decreases eg. after eating a chocolate bar the utility per unit diminishes
2
Q
Total Revenue formula ?
A
Total Revenue= Price x Quantity
3
Q
Average Revenue formula ?
A
Total Revenue / Quantity
4
Q
Marginal Revenue formula?
A
Marginal Revenue= change in total revenue/ change in quantity
5
Q
What are the characteristics of perfect competition?
A
- Many buyers
- homogenous goods
- Firms are price takers
- No barriers to entry or exit
- perfect information
6
Q
what are the characteristics of imperfect competition?
A
- few buyers/sellers
- differentiated goods
- Firms are price makers
- high barriers to entry and exit
- imperfect information
