3.3 Revenues, costs and profits

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3.3.1 What is total revenue?
Total amount of money coming into the business through the sale of goods and services. Quantity of goods sold x price
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3.3.1 What is average revenue?
Total revenue/output
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3.3.1 What is marginal revenue?
The extra revenue that the firm earns from selling one more unit of production. Change in total revenue/change in output.
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3.3.1 What is the relationship of PED and revenue?
A perfectly elastic demand curve=MR=AR. Most goods have a downward sloping demand curve so MR and AR(demand curve) are downwards.
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3.3.2 What is total cost?
The cost of producing a given level of output: fixed + variable costs
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3.3.2 What are total fixed costs?
Costs that do not change with output and remain constant e.g. rent, machinery
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Card 2

Front

3.3.1 What is average revenue?

Back

Total revenue/output

Card 3

Front

3.3.1 What is marginal revenue?

Back

Preview of the front of card 3

Card 4

Front

3.3.1 What is the relationship of PED and revenue?

Back

Preview of the front of card 4

Card 5

Front

3.3.2 What is total cost?

Back

Preview of the front of card 5
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