how do you calculate total revenue for a monopoly?
The total revenue is found by multiplying the price of one unit sold by the total quantity sold. For example, if the price of a good is $10 and a monopolist produces 100 units of a product per day, its total revenue is $1,000.
how do you find the profit maximization of a monopoly?
The profit–maximizing choice for the monopoly will be to produce at the quantity where marginal revenue is equal to marginal cost: that is, MR = MC. If the monopoly produces a lower quantity, then MR > MC at those levels of output, and the firm can make higher profits by expanding output.
how do you find total revenue?
Total revenue in economics refers to the total receipts from sales of a given quantity of goods or services. It is the total income of a business and is calculated by multiplying the quantity of goods sold by the price of the goods.
What is total revenue in accounting?
Revenue is the total amount of income generated by the sale of goods or services related to the company’s primary operations. Revenue is often referred to as the top line because it sits at the top of the income statement. The top line refers to a company’s revenues or gross sales.
Do monopolies price discriminate?
In monopoly, there is a single seller of a product called monopolist. The monopolist has control over pricing, demand, and supply decisions, thus, sets prices in a way, so that maximum profit can be earned. This practice of charging different prices for identical product is called price discrimination.
What is the profit maximizing price?
This equilibrium price is determined by finding the profit maximizing level of output—where marginal revenue equals marginal cost (point c)—and then looking at the demand curve to find the price at which the profit maximizing level of output will be demanded. Monopoly profits and losses.
Which is the best example of price discrimination?
Industries that commonly use price discrimination include the travel industry, pharmaceutical industry, and textbook publishers. Examples of forms of price discrimination include coupons, age discounts, occupational discounts, retail incentives, gender based pricing, financial aid, and haggling.
Where is total revenue on a balance sheet?
Revenue normally appears at the top of the income statement. However, it also has an impact on the balance sheet. If a company’s payment terms are cash only, then revenue also creates a corresponding amount of cash on the balance sheet.
How is total revenue related to elasticity of demand?
How is total revenue related to elasticity of demand? If total revenue increases as price decreases then demand is elastic. Changes in the price of such goods lead to a relatively change in quantity demanded.
What is average revenue?
Average revenue is the revenue generated per unit of output sold. It plays a role in the determination of a firm’s profit. Per unit profit is average revenue minus average (total) cost. A firm generally seeks to produce the quantity of output that maximizes profit.
How do you find the price elasticity of demand?
The price elasticity of demand is the percentage change in the quantity demanded of a good or service divided by the percentage change in the price. The price elasticity of supply is the percentage change in quantity supplied divided by the percentage change in price.