it is a presentation on revenue concept

2. General concept of total revenue, average revenue and
marginal revenue.
Derivation of TR, AR and MR under perfect competitive and
monopoly market structure.
Relationship between TR, AR and MR.

3. A. Total Revenue (TR):
Formula:

4. B. Average Revenue (AR):
Formula:

5. C. Marginal Revenue
(MR):
Formula:

6. ILLUSTRATION
QTY 1 2 3 4 5 6 7 8
PRICE 12 11 10 9 8 7 6 5
Output Price TR AR MR
1 12 12 12 -
2 11 22 11 10
3 10 30 3 8
4 9 36 9 6
5 8 40 8 4
6 7 42 7 2
7 6 42 6 0
8 5 40 5 -2
SOLUTION

7. Total Revenue Under Perfect Competition
Units of Output (Q) Per Unit Price (P) Total Revenue (TR)
0 10 0
1 10 10
2 10 20
3 10 30
4 10 40
5 10 50

8. TR
OutputO
64 5321
40
TR
20
30
50
10

9. AVERAGE REVENUE UNDER PERFECT
COMPETITION
Units of
Output (Q)
Per Unit Price
(P)
Total Revenue
(TR)
Average Revenue
(AR) = TR/Q
0 10 0 -
1 10 10 10
2 10 20 10
3 10 30 10
4 10 40 10
5 10 50 10

10. • Graphically,
AR
OutputO
64 5321
40
20
30
50
10 AR

11. Units of
Output (Q)
Per Unit Price
(P)
Total Revenue
(TR) = P × Q
Average
Revenue
(AR) = TR/Q
Marginal
Revenue
(MR) = ΔTR/ΔQ
0 10 0 - -
1 10 10 10 10
2 10 20 10 10
3 10 30 10 10
4 10 40 10 10
5 10 50 10 10
Marginal Revenue in Perfect Competition

12. MR
OutputO
64 5321
40
20
30
50
10 MR
Graphically,

13. Monopoly Market

14. AR, TR & MR Under Monopoly

15. RELATIONSHIP BETWEEN AR AND MR
CURVES & PRICE ELASTICITY

16. Quantity
Q
AR
=AR curve
MR
curve

17. What we covered

18. Conclusion !

19. THANK YOU
!