CBSE Class 12-commerce Answered
What is average revenue and how is it related to price?
Explain with a diagram.
Asked by Topperlearning User | 25 Apr, 2016, 02:51: PM
Expert Answer
Average revenue of a firm is the total revenue per unit of output sold.
AR= TR/q -----(1)
TR = p*q -----(2)
By relating equation 1 and 2, we will find
AR= p * q/q = p
When AR equals the market price, the firm can sell any amount of good at a given price.
Answered by | 25 Apr, 2016, 04:51: PM
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