What are meant by total revenue, average revenue and marginal revenue?

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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

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State the relation between marginal revenue and average revenue.

Explain the relationship between marginal revenue and average revenue.

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

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