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The theory of the firm under perfect competition — Economics STD 11 Commerce — Question

CBSE BoardEnglish MediumSTD 11 CommerceEconomicsThe theory of the firm under perfect competition3 Marks
Question
Define revenue. State the relation between marginal revenue and average revenue.
✓

Answer

Revenue in economics refers to the market value of output produced or it is receipts from the sale of output produced.
Marginal Revenue and Average Revenue are related to each other in the sense that:
  1. If MR is greater than AR, then AR will rise.
  2. If MR is equals to AR, then AR remains constant.
  3. If MR is less than AR, then AR will fall.

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