what do you mean by revenue curve?
Revenue is the income generated from the sale of goods and services in a market. Average Revenue (AR) = price per unit = total revenue / output. The AR curve is the same as the demand curve. Marginal Revenue (MR) = the change in revenue from selling one extra unit of output. Total Revenue (TR) = Price per unit x
what is the other name of average revenue curve?
Demand curve is the other name that is given to the average revenue curve. Average revenue curve is often called the demand curve due to its representation of the product’s demand in the market.
Why is AR Mr Perfect competition?
Explain. Simply put, under perfect competition MR = AR because all goods are sold at a single (i.e. same price) price in the market. We know that under perfect competition, industry is the price maker and the firm the price taker (See Q.
what is revenue and types of revenue?
ADVERTISEMENTS: Revenue Types : Total, Average and Marginal Revenue! The term revenue refers to the income obtained by a firm through the sale of goods at different prices. The revenue concepts are concerned with Total Revenue, Average Revenue and Marginal Revenue.
Why is average revenue horizontal?
The average revenue curve is a horizontal straight line parallel to the X-axis and the marginal revenue curve coincides with it. This is because under pure (or perfect) competition the number of firms selling an identical product is very large.
What are different types of revenue?
Types of revenue accounts
What is TR AR and MR?
TR = OUTPUT*PRICE. Marginal revenue is the change in total revenue when one more unit of a commodity is sold. MR= change in TR/change in quantity sold. Average revenue refers to revenue per unit of output. AR=TR/Q.
Why is TR Maximised when Mr 0?
The marginal revenue (MR) curve also slopes downwards, but at twice the rate of AR. This means that when MR is 0, TR will be at its maximum. Increases in output beyond the point where MR = 0 will lead to a negative MR.
Why is ar the demand curve?
Average revenue curve is often called the demand curve due to its representation of the product’s demand in the market. Each point on the curve represents the price of the product in the market. Price determines the demand for a product, hence Average revenue curve is also demand curve.
Why is Mr downward sloping?
Graphically, the marginal revenue curve is always below the demand curve when the demand curve is downward sloping because, when a producer has to lower his price to sell more of an item, marginal revenue is less than price.
What do u mean by market?
Definition: A market is defined as the sum total of all the buyers and sellers in the area or region under consideration. The area may be the earth, or countries, regions, states, or cities. The value, cost and price of items traded are as per forces of supply and demand in a market.
Why are ar prices?
Average Revenue and Marginal Revenue: When the monopolist charges the same price for all units sold, its AR is identical with the price it charges. This means that the market demand curve is also the firm’s AR curve.
What is the shape of the demand curve?
The demand curve is shaped by the law of demand. In general, this means that the demand curve is downward-sloping, which means that as the price of a good decreases, consumers will buy more of that good. Demand Curve: The demand curve is the graphical depiction of the demand schedule.