Micro 4.7 0.0 / 5 ? EconomicsTotal Revenue, Average Revenue, Marginal Revenue and ProfitA2/A-levelAQA Created by: neve.whinnCreated on: 14-03-20 12:12 How is total revenue calculated? Price x quantity 1 of 8 How is average revenue calculated? Total revenue / quantity. 2 of 8 What is marginal revenue? The addition to a firm’s total revenue from selling an additional unit of output. 3 of 8 How is marginal revenue calculated? Change in total revenue / change in output. 4 of 8 How is profit calculated? Total revenue – total costs. 5 of 8 How does profit affect entrepreneurs? It creates an incentive for entrepreneurs to take a business risk. 6 of 8 What is normal profit? The minimum level of profit required to reward the entrepreneur for taking a risk and therefore to stay in a particular line of business. 7 of 8 What is supernormal profit? The profit over and above normal profit, sometimes referred to as abnormal or excess profit. 8 of 8
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