Categories
Economics

Revenue concept and types of Revenue

  1. TOTAL REVENUE (TR): This refers to the total income which a firm derives from the sale of its products.

Total Revenue = Price x Quantity (TR = PxQ)

  1. AVERAGE REVENUE (A.R): The average revenue is the same as the price per unit of the commodity.  It is derived by dividing the total revenue by the total unit of the commodity sold.
revenue

REVENUE SCHEDULE OF A FIRM

Quantity sold (Output)Total revenue (N)Average Revenue (Unit Price) NNapinal Revenue (N)
000
1400400400
2700350300
3900300200
41040260140
51150230110
6120020050

The most profitable output is the point where marginal cost is equal to marginal revenue.

ASSIGNMENT

TABLE OF A FIRM OF REVENUE AND COST

Quantity of yams (kg)Total Revenue (TR) NMarginal Revenue (ML) NTotal Cost (TC) NMarginal Cost (MC) N
005
19983
2189101
3246215
428Q254
530225U
6P125O
728-3251
824R24-2

Use the table to answer the following questions

  1. Complete the table by calculating the missing figures P, Q, R, S, T and U
  2. At what output is profit maximized
  3. Calculate the profit when the quantity sold is 5
  4. At what output does MC begins to rise

We are interested in promoting FREE learning. Tell your friends about Stoplearn.com. Click the share button below!

Download our free Android Mobile application: Save your data when you use our free app. Click to Download StopLearn app.

Download free editable Resume/CV templates: Click here. Ask your question: Expert tutors will personally reply you usually within 24 hours.