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3 Tutorials that teach Revenue:Total, Marginal and Average
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Revenue:Total, Marginal and Average

Revenue:Total, Marginal and Average

Author: Justin Tapp
Description:

This lesson will explain Revenue:Total, Marginal and Average

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Tutorial
Terms to Know
Average Revenue

Total revenue divided by the quantity sold.

Marginal Revenue

The additional revenue resulting from the increase of product sales by one unit.

Output Effect

The revenue received from selling additional units of a good/service.

Price Effect

In order to sell additional units, competitive firms must lower their price. The price effect represents the loss in revenue resulting from this price drop.

Total Revenue

The amount received from sales of the good or service produced.

Formulas to Know
Average Revenue

A R space equals space fraction numerator T R over denominator Q end fraction equals fraction numerator T o t a l space R e v e n u e over denominator Q u a n t i t y end fraction

Marginal Revenue

M R space equals space fraction numerator increment T R over denominator increment Q end fraction equals fraction numerator C h a n g e space i n space T o t a l space R e v e n u e over denominator C h a n g e space i n space Q u a n t i t y end fraction

Total Revenue

T R space equals space P space left parenthesis p r i c e right parenthesis space X space Q space left parenthesis q u a n t i t y right parenthesis