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Define Or Explain :Average Revenue. - Economics

Define or Explain :

Average revenue.

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Solution

Average revenue

Average revenue refers to revenue received per unit from the sale of given quantity of goods. It is obtained by dividing total revenue by the number of units sold.

For example, if a producer sells 10 units of goods and receives total revenue of 500 then average revenue can be calculated as follows:

AR = TR/TQ = 500/10 = Rs. 50/-  

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