Average Revenue Concepts It is defined as total revenue divided by total number of units sold i.e. AR=TR/q1 Where, AR stands for average revenue TR for total revenue Q1 for total output produced, If TR is 2000 and q1 is 20, the AR will be 100 i.e. (2000/20) MIET, MeerutAverage Revenue Concepts e@ The AR will be same as the price © If we assume that the same price is charged oka AUli a © But when seller sells different units of the product at different prices ® Then average revenue will not be equal to price e@ In actual life however, seller usually charges the same price for the different units of the product. etAverage Revenue Concepts e@ Thus in Economics we use price & average price as synonyms And since the buyer's demand curve represents the quantities demanded at various prices. It also shows the average revenue at which the various amount of goods are sold by the Soitm Therefore, the demand curve is generally called average revenue curve. Ss Promos