Question

Compute the total revenue, marginal revenue and average revenue schedules in the following table. Market price of each unit of the good is 10.

Quantity sold	TR	MR	AR
0 1 2 3 4 5 6

Answer 1

QUANTITY SOLD	TR	MR	AR
0	0	0	-
1	10	10	10
2	20	10	10
3	30	10	10
4	40	10	10
5	50	10	10
6	60	1O	10

Total money receipts of a firm from the sale of a given output is called total revenue.

TR = OUTPUT*PRICE

Marginal revenue is the change in total revenue when one more unit of a commodity is sold.

MR= change in TR/change in quantity sold

Average revenue refers to revenue per unit of output.

AR=TR/Q

If AR is constant, MR is equal to AR. Both are indicated by the same horizontal straight line(a situation of perfect competition)

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