Capital And Revenue

Step 1: Understanding the Concept:
- Total Revenue (TR): Total money received by selling a given quantity ( ).
- Average Revenue (AR): Revenue per unit of output sold. It is always equal to the Price ( ).
- Marginal Revenue (MR): Additional revenue generated by selling one extra unit ( ).
Step 2: Detailed Explanation:
The relationship depends on the market condition:
1. Under Perfect Competition (Price Constant):
- AR and MR are equal and constant ( ).
- The AR/MR curve is a horizontal line.
- TR increases at a constant rate, represented by a straight line from the origin.
2. Under Imperfect Competition (Price Falls to sell more):
- Both AR and MR decline. MR falls faster than AR ( ).
- When MR is positive, TR increases (but at a decreasing rate).
- When MR is zero, TR is at its maximum (Peak point).
- When MR becomes negative, TR starts to fall.
Step 3: Final Answer:
In summary, TR is the sum of MR; AR represents the price; and MR determines the slope and direction of the TR curve.

Step 1: Understanding the Concept:
Marginal Revenue (MR) measures the change in Total Revenue (TR) resulting from a one-unit change in the quantity sold ( ).
Step 2: Detailed Explanation:
1. Discrete Method: If we want to find the MR of the -th unit, we subtract the TR of units from the TR of units. This is shown in Option (A).
2. General/Change Method: If the change in quantity is more than one unit, we use the ratio of total change in revenue to total change in quantity. This is shown in Option (B).
Both are mathematically valid definitions of the same economic concept.
Step 3: Final Answer:
Since both formulas are standard ways to calculate MR, Option (C) is correct.