Question
Average Revenue and Average Cost.
| Average Revenue (AR) | Average Cost (AC) |
| (a) Average revenue refers to average income earned per unit of a sold commodity. | (a)Average cost refers per unit of cost of production of a commodity produced. |
| (b) It is calculated by dividing total revenue (TR) earned by number of unit sold. | (b) It is calculated by dividing total cost (TC)by number of units of that commodity produced. |
| (c) Symbolically it in expressed as$[$ latex $] \frac{\text { TotalRevenue }}{\text { TotalQuantitysold }}[/$ latex $]$ | (c) Symbolically it is expressed as TotalCost $\overline{\text { TotalQuantityproduced }}$ |
| E.g. If TR from sale of 10 units of a commodity is Rs. 1000 then, AP = 1000/10 = Rs. 100 | E.g. If TC of 100 units a commodity is Rs. 1000 then, $\mathrm{AC}=\frac{1000}{100}=$ Rs. 10 |
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