--%>
Assignment Help - homework help

Explain the concept of revenue

Explain the concept of revenue.

E

Expert

Verified

For the purpose of demand analysis, this is considered helpful to differentiate between different types of revenue as follows:

Average Revenue (AR):

Average Revenue means the whole receipts from sales divided with the number of unit sold.

AR= TR/Q

Total Revenue (TR):

Total Revenue means the whole sales proceeds. This can be ascertained with multiplying quantity sold through price.

TR =P x Q

Incremental Revenue (IR):

Incremental Revenue measures then differences among the new TR and existing TR

IR=R2-R1 =?R

Marginal Revenue (MR);

This is the additional revenue that would be earned by selling an additional unit of a products firm. This demonstrates the change in TR while one more or one less unit is sold.

MR= R2-R1/Q2-Q1 = ?R/?Q

Here, R1= Total Revenue before price change
R2= Total Revenue after price change
Q1 = old quantity before price change
Q2 = new quantity after price change.

   Related Questions in Managerial Economics

  • Q : Illustrate profit or loss on the cost

    A firm's total profit can be computed as all of the given except w) total revenue minus total cost. x) average profit per unit times quantity sold. y) (price minus average total cost) multiply with times quantity sold. z) marginal profit times quantity sold.

  • Q : Income effect and substitution effect

    When comparing these labor supplies, which are clear by the income effect of a modification in wage rates is: (w) negative for Morgan and positive for Chandra. (x) less powerful than substitution effect for both of such workers. (y) positive for Morgan and negative fo

    		•
  • Q : Occurrence of General Training General

    General training occurs while a: (w) secretary learns a new office procedure. (x) handyman learns to drive a semi-truck. (y) messenger learns the company’s in-house mail route. (z) navy recruit learns how to repair a guided missile.

  • Q : Income effect by personal supply of

    A personal supply of labor is exemplified by an income effect which dominates the substitution effect if: (w) Trina retires to a beach condo after working for the city for 42 years. (x) members of a rock band give up touring for a yea

    		•
  • Q : Costs of investing within human capital

    The costs of investing within human capital are probably to be borne by the employee when human capital a worker obtains “on the job” is: (1) general. (2) marginal. (3) precise. (4) generic. (5) specific.

    Q : Illustrates the term Law of Demand

    Illustrates the term Law of Demand? Answer: The law of Demand is termed as the “first law in market”. It shows the relation in between quantity and price

    		•
  • Q : What are the important areas of

    What are the important areas of decision making?

    		•
  • Q : Marginal Product of Labor in Firm If

    If this firm maximizes profit, this will be producing under circumstances of: (1) increasing returns to labor. (2) economies of scale. (3) diminishing returns to labor. (4) constant returns to labor. (5) adverse selection and moral hazard.

    Q : Explain the concept of revenue Explain

    Explain the concept of revenue.

    		•
  • Q : States the implicit cost concept briefly

    States the implicit cost concept briefly.

    		•