Revenues and Profits

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<ul><li> 1. A2 Microeconomics - Tutor2uRevenues and Profits</li></ul> <p> 2. Revenues RevenueAverage Revenue = DemandOutput Sold 3. Revenues RevenueP1Average Revenue = DemandQ1Output Sold 4. Revenues RevenueTotal Revenue = Price x Quantity (P1 x Q1)P1Average Revenue = DemandQ1Output Sold 5. Revenues RevenueTotal Revenue = Price x Quantity (P1 x Q1)P1Cutting the price from P1 to P2 causes total revenue to riseP2Average Revenue = DemandQ1Q2Output Sold 6. Revenues RevenueTotal Revenue = Price x Quantity (P1 x Q1)P1Cutting the price from P1 to P2 causes total revenue to riseB P2AC Q1Area A+ B is smaller than A+CAverage Revenue = DemandQ2Output Sold 7. Revenues RevenueIf a fall in price causes total revenue to rise then marginal revenue will be positiveP1B P2AC Q1Average Revenue = DemandQ2Output Sold 8. Revenues: Average and Marginal Revenue (AR and MR) RevenueAverage RevenueMarginal RevenueOutput Sold 9. Revenues RevenueP1Average RevenueQ1Marginal RevenueOutput Sold 10. Revenues RevenueWhen MR = zero, total revenue is maximisedP1Average RevenueQ1Marginal RevenueOutput Sold 11. Analysis of Revenues, Costs and Profits Costs &amp; RevenueMCACARMROutput 12. The Profit Maximising Output Costs &amp; RevenueMCACARMRQ*Output 13. The Profit Maximising Price Costs &amp; RevenueMCACP* ARMRQ*Output 14. The Profit Maximising Price Costs &amp; RevenueMCACP* ARACMRQ*Output 15. The Profit Maximising Price Costs &amp; RevenueMCACP*SNPARACMRQ*Output 16. Analysis Diagram for a Loss-Making Business Costs &amp; RevenueMCMRAROutputAC 17. Loss-Making Business Costs &amp; RevenueMCC1MR(MR=MC)Q1AROutputAC 18. Loss-Making Business Costs &amp; RevenueMCC1 P1MR(MR=MC)Q1AROutputAC 19. Loss-Making Business Price &lt; AC (subnormal profits) Costs &amp; RevenueMCC1 P1MR(MR=MC)Q1AROutputAC 20. Get help from fellow students, teachers and tutor2u on Twitter:#econ3@tutor2u_econ </p>

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