Answer to Question #192011 in Economics for ashu

Question

explain the relationship between AR and MR

Answer 1

Total (total) income (TR) is the total amount of money earned from the sale of a specified quantity of a product.

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.