Can the average revenue be negative?
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Yes, the revenue can also be negative. It means even by selling more units total revenue is falling. In such a situation, marginal revenue becomes negative. Similarly, in the figure 1 B average revenue curves are sloping downward. It means average revenue falls as more and more units are sold.
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Yes, the average revenue can be negative if the price decreases.
What are the characteristics of average revenue?
- It is the amount which we earn at a particular person per unit
- This revenue is used in the telecommunication business to calculate the earning of one person
- The average revenue is equal to the cost and marginal revenue in a perfect competition
- We calculate it as total revenue divided by the number of units
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