F584: Revenues 3.0 / 5 based on 1 rating ? EconomicsCompetitive marketsA2/A-levelOCR Created by: Natan21Created on: 14-07-15 10:09 Average revenue (AR) Demand and average curves are identical. Average revenue=Demand 1 of 5 Marginal revenue (MR) Marginal revenue is always twice as steep as average revenue. mMR/2=mAR ∴ mMR=2(mAR) m=gradient 2 of 5 Total revenue (TR) Total revenue always rises and falls overtime (arch) ∵ in order to sell more, price must fall. 3 of 5 relation between MR & TR As long as marginal revenue is positive, Total revenue is not decreasing. 4 of 5 AR and elasticities Every demand (i.e. average revenue) curve goes through 3 stages of elasticity except perfectly elastic (horizontal) or inelastic (vertical) curves. 5 of 5
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