Is demand the same as average revenue?

The demand curve equals the average revenue curve in all cases. This makes sense if you think about what average revenue is, it’s just the total revenue divided by quantity sold, and the price and quantity are both taken from the demand curve.

What is average revenue equal to?

Average revenue is referred to as the revenue that is earned per unit of output. In other words, it is the revenue that is obtained by the seller on selling each unit of the commodity. Average revenue of a business is obtained by dividing the total revenue with the total output.

Does demand equal average revenue in monopoly?

Since he charges a single price for all the units he sells, the average revenue per unit is identical to the price. Therefore, the market demand curve = the average revenue curve for the monopolist.

Is total revenue equal to demand?

Note that the amount of sales at each price is equal to the firm’s average revenue. As the demand curve also shows the average revenue the firm makes at each price level, the demand curve equals the firm’s average revenue. You can also calculate the firm’s total revenue by simply multiplying the quantity by the price.

Is marginal revenue equal to demand?

The marginal revenue curve is a horizontal line at the market price, implying perfectly elastic demand and is equal to the demand curve. Under monopoly, one firm is a sole seller in the market with a differentiated product.

Why average revenue is the demand curve?

The demand curve shows the relationship between the price=AR and the quantity demanded of a good in the market. The average revenue curve is basically the price of a good. So, the average revenue curve is also called the demand curve.

Why is average revenue equal to price?

Average revenue equals total revenue divided by the quantity and therefore equals the price. The average revenue curve and the demand curve are thus the same thing.

Why average revenue and demand are the same curve?

Answer to Question 1: Average revenue equals total revenue divided by the quantity and therefore equals the price. The average revenue curve and the demand curve are thus the same thing.

Why is average revenue the demand curve monopoly?

A curve that graphically represents the relation between average revenue received by a monopoly for selling its output and the quantity of output sold. Because average revenue is essentially the price of a good, the average revenue curve is also the demand curve for a monopoly’s output.

Why average revenue is equal to price?

1 Answer. Average Revenue (AR) is defined as the revenue earned per unit of output sold. AR is the same as the price(P) of the output(Q). Thus, AR is always equal to the price of the output.

Why average revenue curve is demand curve?