Concept explainers
The relationship between AR and MR, the
Concept Introduction:
Marginal Revenue- It is the additional revenue earned by a seller by selling one more unit of output in the market.
Average Revenue- It is the Total Revenue (TR) divided by the number of units sold or the revenue per unit. Alternatively, it is called the price.
Average Fixed Cost (AFC)- Fixed Cost is the one-time expenditure incurred by a producer which is a liability irrespective of the level of output like rent for the building. Per unit fixed cost is the average fixed cost.
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