4.6 Marginal, Average, and Total Revenue
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6 Terms
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When is total revenue maximised
When marginal revenue = 0
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Why is the average revenue curve the firm's demand curve
The average revenue curve represents the price at which each unit is sold
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Marginal Revenue
The additional revenue gained from selling one more unit of a product
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Relationship between average and marginal revenue
In perfect competition, average revenue equals marginal revenue
In imperfect competition, marginal revenue is less than average revenue due to the downward sloping demand curve
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Total Revenue
Total income a firm receive from selling its goods or services
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Average Revenue
Revenue per unit sold