Question

Distinguish between the Average Revenue and Average Cost

Answer 1

For example, if a firm makes 100 T-shirts and sells each one for $10, its average revenue is $10 because each unit of output resulted in $10 of revenue. Average revenue can be calculated by dividing total revenue by the quantity of units sold. Average revenue is also equal to the price level.
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Answer 2

Answer:

Average Revenue and Average Cost are differentiated as -

• Average revenue refers to income from the selling of a given quantity of goods earned per unit. Through dividing total income by the number of units sold, it is obtained.
• Average Cost refers to the cost per production and distribution unit incurred. By dividing total costs by the number of units produced, it is obtained.
• Average revenue = Total Revenue/ Total Quantity
• Average cost = Total Cost/ Total Quantity