Average revenue is the revenue generated per unit of output. Thus, it is calculated by dividing total revenue by the quantity of output. Option B correctly reflects this definition. The other options represent different calculations such as profit or marginal revenue, and are not the correct formula for average revenue.

Solved

Average Revenue Is

Question 70

Multiple Choice

Average revenue is

A) total revenue minus total cost
B) total revenue divided by quantity of output
C) total revenue divided by quantity of input
D) the change in total revenue divided by the change in output
E) the change in total revenue divided by the change in the quantity of an input used

Correct Answer: