Revenue Concepts

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Revenue Concepts

By Revenue of a firm is meant the total sale proceeds or the Total receipts of a firm from the sale of output. There are various kinds of revenues i.e. Total Revenue, Marginal Revenue, Average Revenue.
Total Revenue
It is the total amount received by a firm after selling the whole of output produced during a given period of time. 

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If a firm producing 100 chairs and sells in the market at Rs.100 per chair. The total revenue of the firm will be 1000.  TR = price x q.sold.

Marginal Revenue:– It is the net addition made to the total revenues by selling an extra unit produced. Marginal revenue indicates the rate of change of total revenue (MR=∆TR/∆Q).

Average Revenue:- It is the per unit revenues which is obtained by dividing the total revenue by no. of units sold in the market. e.g. If a firm sells 10 chairs for Rs.1000 then average revenues will be 1000 AR=TR/q.sold.
Revenue under perfect competition
Price per unit
Unit of output
Total Revenue
Marginal Revenue
Average Revenue
1000
1
1000
1000
1000
1000
2
2000
1000
1000
1000
3
3000
1000
1000
1000
4
4000
1000
1000
1000
5
5000
1000
1000

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For correction and improvements please use the comments section below.

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Naeem Javid Muhammad Hassani

NJMH is working as Deputy Conservator of Forests in Balochistan Forest & Wildlife Department (BFWD). He is the CEO of Tech Urdu (techurdu.net) Forestrypedia (forestrypedia.com), Majestic Pakistan (majesticpakistan.pk), All Pak Notifications (allpaknotifications.com), Essayspedia, etc & their YouTube Channels). He is an Environmentalist, Blogger, YouTuber, Developer & Vlogger.

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