MR, AR, and TR

• Total revenue


  Price * quantity sold; revenue received from the sale of a given level of output.
• Average revenue


  Average recepit per unit; TR/quantity sold. The price each unit is sold for.
• Marginal revenue

  The extra revenue earned from the sale of one extra unit.
• The AR curve is the firm's demand curve. This is because the average revenue curve is the price of the good.
• Profit is the difference between TR and total costs.
• When demand is perfectly elastic, marginal revenue = average revenue.
• Marginal revenue measures the change in total revenue with respect to changes in the amount of goods and services sold.
• MR = change in TR / change in quantity sold.