What are revenue curves?
The revenue curve of a firm is majorly represented by the Average Revenue and Marginal Revenue curves of a firm. These curves show the behaviour of the revenue of a firm.
What is marginal revenue curve?
The marginal revenue curve is a horizontal line at the market price, implying perfectly elastic demand and is equal to the demand curve. The marginal revenue curve is downward sloping and below the demand curve and the additional gain from increasing the quantity sold is lower than the chosen market price.
What is revenue discuss the various revenue curves in detail?
Under perfect competition, average revenue curve is a straight horizontal line and is equal to MR. 2. In pure monopoly, AR curve is a rectangular hyperbola and MR curve coincides with the horizontal axis.
What is cost and revenue curves?
The answer is the distribution between fixed and variable costs. Let’s examine two situations – where fixed costs are a very high proportion of total costs, and where they are a low proportion.
What are the types of revenue in economics?
Revenue Types : Total, Average and Marginal Revenue
- Total Revenue: The income earned by a seller or producer after selling the output is called the total revenue.
- Average Revenue: Average revenue refers to the revenue obtained by the seller by selling the per unit commodity.
- Marginal Revenue:
What is the revenue curve of an industry in a monopolistic?
While competitive firms experience marginal revenue that is equal to price – represented graphically by a horizontal line – monopolies have downward-sloping marginal revenue curves that are different than the good’s price. For monopolies, marginal revenue is always less than price.
What is AR and MR economics?
A firm can sell more quantity of output at the same price (see Table 7.2). It means, the revenue from every additional unit (MR) is equal to AR. Always remember that when a firm is able to sell more output at the same price, then AR = MR at all levels of output.
Why the AR and MR curves are two different curves?
In Table 7.4, both MR and AR fall with increase in output. However, fall in MR is double than that in AR, i.e., MR falls at a rate which is twice the rate of fall in AR. As a result, MR curve is steeper than the AR curve because MR is limited to one unit, whereas, AR is derived by all the units.
What is MC and AC in economics?
Marginal cost (MC) is the extra cost incurred when one extra unit of output is produced. Average product (AC) is the total cost per unit of output.
What are the three types of revenue?
Types of revenue accounts
- Sales.
- Rent revenue.
- Dividend revenue.
- Interest revenue.
- Contra revenue (sales return and sales discount)
What is the slope of the average revenue curve?
In the imperfect competition market, both Average revenue curve and Marginal revenue curve slope downwards from left to right. Also, the Marginal revenue curve is always below the Average Revenue curve.
How are revenue curves different in different markets?
As we know the revenue curves are different in different markets which can be overseen as: 1. Perfectly Competitive Market: Revenue curve under perfect competition for a firm is represented by a straight line parallel to the X-axis showing output. The average revenue or price and MR remain constant for the firm.
What is the revenue curve under perfect competition?
1. Under perfect competition, average revenue curve is a straight horizontal line and is equal to MR. 2. In pure monopoly, AR curve is a rectangular hyperbola and MR curve coincides with the horizontal axis.
What is the average revenue curve under monopoly?
Under perfect competition, average revenue curve is a straight horizontal line and is equal to MR. 2. In pure monopoly, AR curve is a rectangular hyperbola and MR curve coincides with the horizontal axis. 3.
