What is average revenue and average revenue curve, Microeconomics

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What is average revenue and average revenue curve

Average Revenue:   The average revenue is the total revenue separated by the level of output. It is therefore the price. 

 Average Revenue Curve:   A curve which plots average revenue. It is equal to the demand curve. The shape of the average revenue curve will depend on the situation the firm is in. If the firm has price setting power then the average revenue curve (demand curve) will be downward-sloping. If the firm is a price-taker then the average revenue curve will be horizontal and the similar as the marginal revenue curve. 

 


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