Revenue Flashcards
1
Q
Total Revenue definition and equation
A
Total Revenue is the total amount of money received from the sale of any good/service
TR = Q * P
2
Q
Average Revenue definition and equation
A
Average Revenue is the average amount received per unit sold.
AR = TR/Q
3
Q
Marginal Revenue definition and equation
A
Marginal revenue is the amount received from selling an extra unit of output.
MR = (Change in TR) / (Change in Q)
4
Q
If Price remains constant, what happens to MR and AR?
A
They also remain
A change in price will result in a change in MR
5
Q
Revenue Maximisation
A
When MR = 0
