Why Average Revenue is the same as the Demand Curve
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. [...]