Theme 3.3.1

Question 1

Formula for total revenue

Answer 1

P x Q

Question 2

Formula for average revenue

Answer 2

TR/Q = Price

Question 3

Formula for marginal revenue

Answer 3

Change in TR/ Change in Q

Question 4

What is the relationship between PED and total revenue

Answer 4

PED helps firms make pricing decisions to increase total revenue

Question 5

What is the relationship total revenue and demand when it is price elastic

Answer 5

Inverse

Price ⬆️ , TR ⬇️

Price ⬇️, TR⬆️

Question 6

What is the relationship total revenue and demand when it is price inelastic

Answer 6

Same

Price ⬆️, TR ⬆️

Price ⬇️, TR ⬇️