Question

If Total Revenue (TR) = Price (P) × Quantity (Q), and Average Revenue (AR) = TR ÷ Q, then AR is equal to ______.

Options

• Q

• P

• TR − Q

• P × Q

Answer 1

If Total Revenue (TR) = Price (P) × Quantity (Q), and Average Revenue (AR) = TR ÷ Q, then AR is equal to P.

Explanation:

AR = TR ÷ Q = (P × Q) ÷ Q = P, so Average Revenue is the same as the price per unit.