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Revenue

 

We identify the Total (TR), Average (AR) and Marginal (MR) Revenues.

 

Total revenue equal to all of the money received for the sale of goods or services. It equals the quantity sold multiplied by the price.

 

Average revenue is the average amount received per item sold. If all output is sold at the same price then the average revenue must equal the price.  Marginal revenue is the amount received from selling an extra unit of output, i.e., how much has the total revenue changed by.

 

The diagrams below show the revenue curves where the demand curve is downward sloping.

 

The diagrams on the below show the revenue curves where the demand curve is perfectly elastic.

 

 

 

E-mail Steve Margetts