In this article we will discuss about the relation between TR, AR and MR with the help of Tables 3.1 and 3.2. In Table 3.1, presented TR, AR and MR schedules (hypothetical) of a competitive firm. Remember that, under perfect competition, the firm can sell more or less any quantity of its product at the price determined in the market, [...]
In Fig. 3.1, the firm's AR and MR curves are given to be AB and AC. The AR curve tells the firm's average revenue (= p) at any q (quantity sold), and it also tells the quantity sold (q) or the demand for the good at any price (p). That is why the firm's AR curve is also the firm's [...]
In this article we will discuss about the relation between price and total revenue of a firm with the help of diagram. If a firm increases the price of its product, then as a consequence, whether its total revenue (TR) will increase or not, would depend on the nature of the elasticity of demand for its product. If the demand [...]