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Economics Theme 3 > Revenue > Flashcards

Flashcards in Revenue Deck (5)
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1
Q

Total Revenue definition and equation

A

Total Revenue is the total amount of money received from the sale of any good/service

TR = Q * P

2
Q

Average Revenue definition and equation

A

Average Revenue is the average amount received per unit sold.

AR = TR/Q

3
Q

Marginal Revenue definition and equation

A

Marginal revenue is the amount received from selling an extra unit of output.

MR = (Change in TR) / (Change in Q)

4
Q

If Price remains constant, what happens to MR and AR?

A

They also remain

A change in price will result in a change in MR

5
Q

Revenue Maximisation

A

When MR = 0