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Tag: AR

Why Average Revenue is the same as the Demand Curve

Posted on 02/01/2013 by Rhys Williams

In Unit 3 Business Economics we are told that D = AR, but why is this?

AR is average revenue, and the calculation for average revenue is Total Revenue / Quantity.

Total Revenue = Price * Quantity

Therefore AR = Price * Quantity / Quantity => Price (as the Quantity is cancelled out)

Hence AR = P, and D = P so we can say that D = AR. [...]

Posted in MicroEconomicsTagged AR, DemandLeave a comment

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