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3 cards from this section. Quick, good the night before a test.
Define total revenue.
Think about how revenue is affected by price and quantity.
What is the relationship between Average Revenue and Price in perfect competition?
Consider the equality of price and revenue per unit.
What is the formula for Total Revenue?
Recall the multiplication of price and quantity.
In perfect competition, Average Revenue equals what?
Think about price structure in competitive markets.
A firm operates in a perfectly competitive market selling pencils at Rs 5 each. If it sells 100 pencils, calculate total revenue, average revenue, and marginal revenue when it decides to sell one more pencil.
Use the revenue formulas you’ve learned.
Discuss why a perfectly competitive firm cannot sustain a price above the market price for long. What would happen to revenue?
Consider market dynamics and the role of competition.
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