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Commerce Exam  >  Commerce Questions  >  Other name by which average revenue curve kno... Start Learning for Free
Other name by which average revenue curve known:
  • a)
    Indifference curve
  • b)
    Profit curve
  • c)
    Average cost curve
  • d)
    Demand curve
Correct answer is option 'D'. Can you explain this answer?
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Verified Answer
Other name by which average revenue curve known:a)Indifference curveb)...
Average revenue curve is often called the demand curve due to its representation of the product's demand in the market. Each point on the curve represents the price of the product in the market. Price determines the demand for a product, hence Average revenue curve is also demand curve.
Assuming it is a perfect competitive market.
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Other name by which average revenue curve known:a)Indifference curveb)...
Average Revenue Curve

The average revenue curve is the graph of the average revenue generated by a firm for each unit of output sold. It is a U-shaped curve that shows the relationship between the quantity of output produced and the price at which it is sold. The average revenue curve is also known as the demand curve.

Other Names

The average revenue curve is also known by the following names:

1. Demand Curve: The demand curve shows the relationship between the price of a product and the quantity demanded by consumers. The average revenue curve is identical to the demand curve, since it represents the price that consumers are willing to pay for each unit of output.

2. Revenue Curve: The revenue curve shows the total revenue generated by a firm for each unit of output sold. The average revenue curve is a segment of the revenue curve that shows the average revenue generated by a firm at different levels of output.

3. Marginal Revenue Curve: The marginal revenue curve shows the additional revenue generated by a firm for each additional unit of output sold. The average revenue curve is the slope of the marginal revenue curve, since it represents the average revenue generated by a firm for each unit of output sold.

Conclusion

In conclusion, the average revenue curve is a U-shaped curve that represents the price that consumers are willing to pay for each unit of output. It is also known as the demand curve, revenue curve, and marginal revenue curve. Understanding the different names of the average revenue curve can help us to better understand the relationship between the price of a product and the quantity demanded by consumers.
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Community Answer
Other name by which average revenue curve known:a)Indifference curveb)...
Option 'D' is correct answer because--*AVERAGE REV
ENUE is nothing butTOTAL REVENUE divided by QUANTITY, and*TOTAL REVENUE is nothing but P
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Direction: Read the following passage and answer the question that follows:The slope of a total revenue curve is particularly important. It equals the change in the vertical axis (total revenu e) divided by the change in the horizontal axis (quantity) between any two points. The slope measures the rate at which total revenue increases as output increases. We can think of it as the increase in total revenue associated with a 1-unit increase in output. The increase in total revenue from a 1-unit increase in quantity is marginal revenue. Thus marginal revenue (MR) equals the slope of the total revenue curve.How much additional revenue does a radish producer gain from selling one more pound of radishes? The answer, of course, is the market price for 1 pound. Marginal revenue equals the market price. Because the market price is not affected by the output choice of a single firm, the marginal revenue the firm gains by producing one more unit is always the market price. The marginal revenue curve shows the relationship between marginal revenue and the quantity a firm produces. For a perfectly competitive firm, the marginal revenue curve is a horizontal line at the market price. If the market price of a pound of radishes is $0.40, then the marginal revenue is $0.40. Marginal revenue curves for prices of $0.20, $0.40, and $0.60. In perfect competition, a firm’s marginal revenue curve is a horizontal line at the market price.Price also equals average revenue, which is total revenue divided by quantity. To obtain average revenue (AR), we divide total revenue by quantity, Q. Because total revenue equals price (P) times quantity (Q), dividing by quantity leaves us with price.Q. The slope of the Total Revenue equals ……..

Direction: Read the following passage and answer the question that follows:The slope of a total revenue curve is particularly important. It equals the change in the vertical axis (total revenu e) divided by the change in the horizontal axis (quantity) between any two points. The slope measures the rate at which total revenue increases as output increases. We can think of it as the increase in total revenue associated with a 1-unit increase in output. The increase in total revenue from a 1-unit increase in quantity is marginal revenue. Thus marginal revenue (MR) equals the slope of the total revenue curve.How much additional revenue does a radish producer gain from selling one more pound of radishes? The answer, of course, is the market price for 1 pound. Marginal revenue equals the market price. Because the market price is not affected by the output choice of a single firm, the marginal revenue the firm gains by producing one more unit is always the market price. The marginal revenue curve shows the relationship between marginal revenue and the quantity a firm produces. For a perfectly competitive firm, the marginal revenue curve is a horizontal line at the market price. If the market price of a pound of radishes is $0.40, then the marginal revenue is $0.40. Marginal revenue curves for prices of $0.20, $0.40, and $0.60. In perfect competition, a firm’s marginal revenue curve is a horizontal line at the market price.Price also equals average revenue, which is total revenue divided by quantity. To obtain average revenue (AR), we divide total revenue by quantity, Q. Because total revenue equals price (P) times quantity (Q), dividing by quantity leaves us with price.Q. The marginal revenue curve shows the relationship between ..................... and ......................

Read the following passage and answer the question that follows:The ordinalist revolution originates in the criticism of the psychological foundations of the theory of demand, namely, the principle of decreasing marginal utility as Alfred Marshall ([1890] 1898) used it. The rejection of hedonist hypotheses led Irving Fisher (1892) and Pareto (1896–97, 1900, 1909) to favour an objective or “positive” approach to economic concepts.The “ordinalist revolution” (Ormazabal 1995, 116) is grounded in a methodological transformation of economics that put the facts of objective experience as a foundation of economics and provided a research program for the ensuing years (Green and Moss 1993; Lewin 1996). Mathematically, ordinalism is entirely based upon the idea that one can dispense with the use of a specific utility function and that no meaning shall be attached to utility measurement, except as an ordinal principle.Clearly, the development of ordinalist must be separated from the introduction of the concept of the indifference curve. Ordinalism was first advocated in Fisher’s “Mathematical Investigations” (1892) and Pareto’s Suunto (1900) and Manual ([1909] 1971), while the indifference curve had appeared in F. Y. Edge worth’s Mathematical Psychics (1881). It was thus only through Fisher’s and Pareto’s recasting that the concept of the indifference curve became irreversibly associated with the promotion of ordinalism.Along the way, the recasting of the theory of choice along ordinalist lines raised a number of issues (about integrability, measurability, and complementarity) that would be progressively settled. A reasonable closing date for the ordinalist revolution is 1950, after Houthakker (1950) and Samuelson’s (1950) contributions.From the late 1920s, the Paretian school was progressively gaining a larger audience while the use of the concept of marginal utility and other derivative concepts was challenged. Consequently, demand theory was recast along the principlesof individual preferences and ordinal utility functions. Nevertheless, English authors proved very silent about the meaning of indifference curves. Most if not all of the reflections after 1920 about the nature of indifference curves took place in America, mainly under the impulse of Henry Schultz at Chicago. This is an American story.Q. ______ is a curve showing a different combination of two goods, each combination offering the same level of satisfaction to the consumer.

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Other name by which average revenue curve known:a)Indifference curveb)Profit curvec)Average cost curved)Demand curveCorrect answer is option 'D'. Can you explain this answer?
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