State and define the types of revenue.

1.	State and define the types of revenue.
Answer» Types of revenue: 1. Total Revenue (TR): Money received by a firm on selling the units it produces is known as revenue. The total income received by firm from sale is called total revenue. This income is known as total revenue or sale revenue. Formula: Total Revenue (TR) = Units sold (Q) × Price of commodity (P) 2. Average Revenue (AR): The revenue generated per unit of output sold is called the Average Revenue (AR). It is obtained by dividing total revenue with total sale. Formula: Average Revenue (AR) = Total Revenue (TR) Total sale (Q) 3. Marginal Revenue: The change in total revenue which results from the sale of one more unit of a commodity is called the marginal revenue. Formula: MR_n = R_n – R_{(n – 1)} where, MR = Marginal Revenue n = Number of sold units R_n = Revenue from the sale of n units commodity R_{(n – 1)} = Revenue from the sale of (n – 1) units

Answer»

Types of revenue:

1. Total Revenue (TR):

Money received by a firm on selling the units it produces is known as revenue. The total income received by firm from sale is called total revenue. This income is known as total revenue or sale revenue.

Formula:

Total Revenue (TR) = Units sold (Q) × Price of commodity (P)

2. Average Revenue (AR):

The revenue generated per unit of output sold is called the Average Revenue (AR). It is obtained by dividing total revenue with total sale.

Formula:

Average Revenue (AR) = Total Revenue (TR) Total sale (Q)

3. Marginal Revenue:

The change in total revenue which results from the sale of one more unit of a commodity is called the marginal revenue.

Formula:

MR_n = R_n – R_{(n – 1)}
where, MR = Marginal Revenue
n = Number of sold units
R_n = Revenue from the sale of n units commodity
R_{(n – 1)} = Revenue from the sale of (n – 1) units

State and define the types of revenue.

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