Revenue

Question 1

Total revenue

Answer 1

• TR=Q x P
  -total amount of money received from the sale of any good

Question 2

Average revenue

Answer 2

• AR= TR/Q
  -the average receipt per unit sold. And is the total revenue divided by the quantity sold

Question 3

Marginal reveune

Answer 3

• MR= change in total revenue/ change in total output
• is the receipts from selling an extra unit of output.

Question 4

Why does the average revenue curve=demand curve

Answer 4

1) Total revenue=price x Quantity
2) Average revenue= price x quantity/quantity
3) Quantity cancels out and we are left with
- average revenue=price
4)The demand curve shows the quantity demanded for a good at any given price at any given time

-therefore,the average revenue curve is the same as the demand curve

Question 5

Difference between fixed and variable costs

Answer 5

Fixed costs are costs that dont change like rent as production levels change
Variable costs are costs that do change like cost of raw materials as production levels change

Question 6

Total revenue when price is constant diagram

Answer 6

Question 7

Average and marginal revenue when price is constant

Answer 7

Question 8

Average and marginal revenue when price is constant

Answer 8

Question 9

Total revenue when price is falling

Answer 9