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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
answered-by-expert 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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