Saturday , 29 November 2014

Define average revenue and write its formula

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Define average revenue and write its formula

Total revenue divided by output

Or

The total receipts from sales divided by the number of units sold, frequently employed in price theory in conjunction with marginal revenue.

Or

The revenue received for selling a good per unit of output sold, found by dividing total revenue by the quantity of output. Average revenue often goes by a simpler and more widely used term… price. Using the longer term average revenue rather than price provides a connection to other related terms, especially total revenue and marginal revenue. When compared with average cost, average revenue indicates the amount of profit generated per unit of output produced. Average revenue is often depicted by an average revenue curve.

Source: http://www.amosweb.com/cgi-bin/awb_nav.pl?s=wpd&c=dsp&k=average+revenue

Formula:

Average revenue = total revenue / quantity

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