Microeconomics Notes Revenues | Minnesota State University Moorhead - Edubirdie

University:
Minnesota State University Moorhead
Course:
ECON-202 | Principles of Economics I: Micro
Academic year:

2020
Views:

307

Pages:

3
Author:

se2bagjuf

Revenues: Total revenue: The total earnings of a firm from the sale of its output. TR = P X Q. Average Revenue: Revenue per unit of output = TR/Q = P Marginal Revenue (MR): Extra revenue from selling one more output unit. MR = ∆TR/∆Q. Revenues of firms with no influence over price (price takers): Such firms are only found in perfect competition. For these firms, P = D = MR = AR. Example: Q P = AR = TR/Q ($) TR ($) 0 - - - 1 5 5 5 MR = ∆𝑇𝑅 ∆𝑄 ($) 2 5 10 5 3 5 15 5 4 5 20 5 Revenues of firms with influence over price: Such firms are found in monopolies, monopolistic competition, and oligopolies. MR = the Slope of the Tr curve. When TR is maximum, MR is 0. Q P = AR = TR/Q ($) TR ($) 0 - - - 1 8 8 8 2 7 14 6 3 6 18 4 4 5 20 2 5 4 20 0 6 3 18 -2 7 2 14 -4 MR = ∆𝑇𝑅 ∆𝑄 ($)

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