Answer to Question #200606 in Economics of Enterprise for Pooja More

Question

From the give table calculate Elasticity of Price, Total Revenue and Marginal Revenue.

Also, explain the relationship between AR and MR?

Answer 1

Total income (TR) is the total amount of money received from the sale of a certain amount of goods.

Average income (AR) is the revenue from the sale of a unit of production, i.e. gross income per unit of product sold.

Marginal (additional) income (MR) is the additional income to the total income of the firm received from the production and sale of one additional unit of goods.

Economic profit is the difference between total income and the sum of external and internal costs.