Economics 3.3.1 Word Scramble
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| Term | Definition |
| revenue | income generated from the sale of goods and services in a market |
| AR | average revenue |
| average revenue | price per unit |
| average revenue formula | total revenue / output |
| MR | marginal revenue |
| marginal revenue formula | change in revenue from selling one extra unit of output |
| TR | total revenue |
| total revenue formula | price per unit * quantity or AR * Q |
| where does maximum total revenue occur? | where marginal revenue is zero |
| what does it mean when total revenue is at maximum? | no more added revenue can be achieved from producing and then selling an extra unit of output |
| what is the coefficient of price elasticity of demand when marginal revenue is zero? | 1 |
| what happens when marginal revenue becomes negative? | if prices were cut further then total revenue would fall |
| where do price takers operate? | in perfectly competitive markets |
| what happens to revenues at high prices? | a fall in price will have an elastic price response causing total revenue to rise |
Created by:
jessharris
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