Derive average revenue and marginal revenue from total revenue with the help of a table.

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Solution

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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Units Sold	Price (Rs.)	Total Revenue (Rs.)	Marginal Revenue (Rs.)
$5$ $4$ $3$	$6$ $7$ $8$	- - -	- - -

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

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

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