F584: Revenues

HideShow resource information
  • Created by: Natan21
  • Created 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

Comments

No comments have yet been made

Similar Economics resources:

See all Economics resources »See all Competitive markets resources »