3.3.1 - Revenue

    Cards (10)

    • What is total revenue?
      Total revenue is the total income a firm receives from selling its goods or services.
    • How is marginal revenue calculated?
      Marginal revenue is calculated as TRPxQTR - PxQ.
    • What does average revenue represent?
      Average revenue represents the revenue earned per unit of output sold, equivalent to the price of a good.
    • What is the relationship between marginal revenue and average revenue?
      Marginal revenue is always twice as steep as average revenue.
    • When is total revenue maximized?
      Total revenue is maximized when marginal revenue equals zero.
    • How does price elasticity of demand affect total revenue?
      Elastic demand leads to an increase in total revenue, while inelastic demand leads to a decrease.
    • What is the marginal revenue for price elastic demand?
      For price elastic demand, marginal revenue is positive.
    • What is the marginal revenue for price inelastic demand?
      For price inelastic demand, marginal revenue is negative.
    • What happens to total revenue when demand is unitary price elastic?
      Total revenue is maximized when demand is unitary price elastic.
    • What factors influence revenue dynamics?
      • Demand elasticity
      • Total Revenue (TR)
      • Average Revenue (AR)
      • Marginal Revenue (MR)
      • Pricing and production strategies
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