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)
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What is total revenue?

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


Curve of a Total Revenue graph:

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


Total Revenue Curve shows you:

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


Slope of the TR curve:

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


What is the TR formula?

PxQ = TR


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.


Total Revenue slope:

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


If you plot each revenue quantity combination:

You can get a Total Revenue Curve.


When you have a collection of points:

You should connect them so they can form a curve.


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.


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

Yes. Refer to the above Q&A.


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.