Revenue and its Forms: Marginal, Average, and Total Revenue in Economics

The video tutorial covers the three forms of revenue: marginal, average, and total revenue. It explains how to calculate each type and their relationships with price elasticity of demand. The tutorial uses examples and graphs to illustrate these concepts, emphasizing the importance of understanding revenue calculations in economics.

What is the formula for calculating total revenue?

• Total revenue = Quantity sold + Price per unit

• Total revenue = Price per unit - Quantity sold

• Total revenue = Quantity sold / Price per unit

• Total revenue = Quantity sold x Price per unit

In the given example, what is the total revenue if a firm sells 50 units at £20 each?

• £2000

• £1000

• £500

• £1500

How is average revenue calculated?

• Average revenue = Total revenue x Quantity

• Average revenue = Total revenue / Quantity

• Average revenue = Total revenue + Quantity

• Average revenue = Total revenue - Quantity

What does a horizontal line on a revenue graph indicate about average and marginal revenue?

• They are zero

• They are increasing

• They are decreasing

• They are constant

Why might a firm need to lower its price to increase output?

• To reduce costs

• To decrease demand

• To increase demand

• To maintain constant revenue

What does the average revenue curve represent in a firm's graph?

• The firm's cost curve

• The firm's supply curve

• The firm's demand curve

• The firm's profit curve

What does price elasticity of demand measure?

• The change in profit due to demand changes

• The change in revenue due to cost changes

• The change in demand due to price changes

• The change in supply due to price changes

When is a product considered to have elastic demand?

• When price elasticity is between 0 and 1

• When price elasticity is exactly 0

• When price elasticity is less than -1

• When price elasticity is greater than 1

What happens to total revenue when demand is inelastic and output increases?

• Total revenue increases

• Total revenue decreases

• Total revenue remains constant

• Total revenue becomes zero

What shape does the total revenue curve typically have?

• A zigzag pattern

• A U-shape

• An inverted U-shape

• A straight line