Revenues, costs, profits

Question 1

Total revenue

Answer 1

-The total amount of money earned by a business through the sales of goods and services
-TR=QuantityxPrice

Question 2

Average revenue

Answer 2

-AR=Total Revenue/Output
=Equal to demand

Question 3

Marginal revenue

Answer 3

-The extra revenue a firm gains from selling one more unit of a good
-MR=change in total revenue/change in output

Question 4

Economies of scale

Answer 4

-Advantages of large scale production
-Allows large firms to operate at a lower
average cost than small firms due to a higher level of output
-experience increasing returns

Question 5

Diseconomies of scale

Answer 5

-Disadvantages that arise in large businesses
-reduce efficiency
-cause AC to rise
-experiences decreasing returns