4. Average Revenue Function
Answers
Answer:
Average revenue of a business is obtained by dividing the total revenue with the total output. Average revenue is the same as the price as when a seller is selling two units of the same product at the same price, but if the two products are sold at two different prices, then the average revenue will be different.
Average revenue of a business is obtained by dividing the total revenue with the total output.
Let me explain you in detail
Average revenue helps in estimating the profit of a business as the profit is calculated by subtracting average revenue with the average cost.
The mathematical formula for calculating average revenue is
The mathematical formula for calculating average revenue isAR = TR / Q
The mathematical formula for calculating average revenue isAR = TR / QWhere
The mathematical formula for calculating average revenue isAR = TR / QWhereAR = Average Revenue
The mathematical formula for calculating average revenue isAR = TR / QWhereAR = Average RevenueTR = Total revenue
The mathematical formula for calculating average revenue isAR = TR / QWhereAR = Average RevenueTR = Total revenueQ = Output