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Explain the relationship between marginal revenue and average revenue using diagram |
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Answer» Marginal revenue is the addition to total revenue by selling one more unit of the commodity. Algebraically it is the total revenue earned by selling ‘n’ units of the commodity instead of n-1. Thus, MRn = TRn – TRn-1; where MRn = Marginal revenue of the nth unit TRn = Total revenue of n units TRn-1 = Total revenue of n-1 units |
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