Total Revenue 8.2-1 Flashcards Preview

Econ 2106 Exam 2 > Total Revenue 8.2-1 > Flashcards

Flashcards in Total Revenue 8.2-1 Deck (12):
1

What is total revenue?

The price of a good or service multiplied by the quantity sold.

2

Curve of a Total Revenue graph:

Is not curved. It is called a 'smooth' curve.

3

Total Revenue Curve shows you:

That for any given quantity of the product sold in a period, how much total revenue the firm earns.

4

Slope of the TR curve:

Rise over the run. Slope of TR = the priceT of the product.

5

What is the TR formula?

PxQ = TR

6

Consider a total revenue table for a firm that makes tv sets:

If price is $500 and they sell 1 tv, $500 x 1 = $500. Therefore, TR = $500.

7

Total Revenue slope:

Is equal to the price of the product for a perfectly competitive firm.

8

If you plot each revenue quantity combination:

You can get a Total Revenue Curve.

9

When you have a collection of points:

You should connect them so they can form a curve.

10

What would it mean to talk about selling one and a half tv sets a week?

It would really just mean that you are selling 3 tv sets every 2 weeks.

11

Does it make sense to think about the possibility of fractional tv sets sold?

Yes. Refer to the above Q&A.

12

Slope example:

500 over 1, 1000 over 2, etc. The ratio of the rise to the run is the price of a tv set ($500). If price were to go up, slope would get steeper. Therefore, the firm is perfectly competitive.