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Revenue & Producer's Equilibrium · Question 2 of 55

Question 2

EasyOriginal question

Average revenue is always equal to

Options for question 2

Show the answer and explanation
CorrectNot quiteAnswer D

Correct answer: D

Explanation

  1. AR = TR ÷ q = (P × q) ÷ q = P, when every unit sells at the same price.

  2. So the AR curve is the firm's demand curve.

Worth noting

AR equals MR only when price is fixed for the firm, as under perfect competition.

Concept
AR equals price
Typical time
40 s
Your time
—
The rule this testsTotal, average and marginal revenue
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Ten questions from Revenue & Producer's Equilibrium, at your own pace.

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Ten questions from Revenue & Producer's Equilibrium, at your own pace.

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