Revenue Flashcards
1
Q
Give the equation for average revenue
A
Average revenue=Price per unit=total revenue/output
2
Q
Give the equation for Marginal revenue
A
Marginal revenue=the change in revenue from selling one extra unit of output
3
Q
When does maximum total revenue occur?
A
When marginal revenue is zero
-No more added revenue can be achieved
4
Q
Where is the point where MR=0 located?
A
Underneath the midpoint of a linear demand curve
5
Q
What is PED when when MR is positive?
A
PED is relatively elastic
6
Q
What is PED when when MR is negative?
A
PED is relatively inelastic
7
Q
What is the relationship between MR and AR when drawn on a diagram?
A
MR is twice as steep as AR
8
Q
A
