Average revenue (ar), Managerial Economics

Assignment Help:

Average Revenue (AR)

This is the revenue per unit of the commodity sold.  It is obtained by dividing Total Revenue by total quantity sold.  For a firm in a perfectly competitive market, the AR is the same as price.  Therefore, if price is denoted by P, then we can say:

P = AR

Because of this, the demand curve which relates prices to quantities demanded at those prices is also called Average Revenue Curve.  In economic theory, the demand curve or price line is often referred to as the revenue curve.


Related Discussions:- Average revenue (ar)

Operating leverage, what is the relation between leverage and elasticity?

what is the relation between leverage and elasticity?

Autonomous expenditure, Autonomous Expenditure Also called Exogenous e...

Autonomous Expenditure Also called Exogenous expenditure, is any expenditure that is taken as a constant or unaffected by any economic variables within our theory.  For instan

Williamson model, williamson model and managerial discretion about its obje...

williamson model and managerial discretion about its objective and statement of problem

Danger of over-specialising - reason for protection, Danger of over-special...

Danger of over-specialising   A country may feel that in its long-term interests it should not be too specialized. A country may not wish to abandon production of certain

Cross-elasticity of demand, Cross-elasticity is the measure of responsivene...

Cross-elasticity is the measure of responsiveness of demand for a commodity to the changes in price of its substitutes and complementary goods. For example, cross-elasticity of dem

Fall in supply - effect on equilibrium price, Fall in Supply When...

Fall in Supply When the supply falls, the supply curve shifts to the left to position S 1 S 1 .  At the initial equilibrium price P 1 , quantity supplied falls from q 1

Product differentiation, PRODUCT DIFFERENTIATION   Product differenti...

PRODUCT DIFFERENTIATION   Product differentiation describes a situation in which there is a single product being manufactured by several suppliers, and the product of each su

What do you mean by external economies, Q. What do you mean by External Eco...

Q. What do you mean by External Economies? External economies arise outside the firm as a result of improvement in industrial environment in that the firm operates. They are ex

Equilibrium national income in a frugal economy, Equilibrium National Incom...

Equilibrium National Income in a Frugal Economy Saving and investment are examples of two categories of expenditure called withdrawals and injections.  A WITHDRAWAL is any inc

Determinants of money supply, DETERMINANTS OF MONEY SUPPLY The total su...

DETERMINANTS OF MONEY SUPPLY The total supply of nominal money in the economy is determined by the joint behaviour of the central bank which controls the total issue of the hig

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd