QUANTITATIVE ECONOMICS
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E.g. The firm below has revenues based upon their weekly sales in $:<br />
Quantity<br />
sold (q)<br />
Price<br />
(p)<br />
Average<br />
revenue (AR)<br />
Total<br />
revenue (TR)<br />
Marginal<br />
revenue (MR)<br />
0 - - - -<br />
10 70<br />
20 60 1200<br />
30 50 50 1500 30<br />
40 40 1600<br />
50 30 -10<br />
60 20<br />
70 10<br />
80 - - - -<br />
In the table above, the TR from selling 30 units is $50 x 30 = $1500.<br />
In the table above, the AR from selling 40 units is $1600 = $40.<br />
40<br />
(Please take note that the AR is the same as the price, AR = P.)<br />
In the table above, the MR from selling 30 units is 1500 - 1200 = 300 = $30.<br />
30 – 20 10<br />
Now you have a go!!<br />
Question 5.3<br />
In the table above, calculate and fill in all of the missing revenue values.<br />
Calculate total revenue, average revenue and marginal revenue from diagrams.<br />
Step1<br />
If you are given a diagram and asked to calculate revenues, then you simply use the<br />
revenue equations given above and the values given in the diagram.<br />
E.g.<br />
Produced by Ian Dorton & Jocelyn Blink Page 36
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