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Total Revenue Test quiz #1 Flashcards

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Total Revenue Test quiz #1
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  • Which of the following would be a likely mathematical expression for total revenue?
    Total revenue is calculated as Price × Quantity (TR = P × Q).
  • If a firm's economic profit is $24, what is its total revenue?
    Total revenue cannot be determined from economic profit alone; you need information on total costs to calculate total revenue.
  • What is the definition of total product (TP) in microeconomics?
    Total product (TP) is the total quantity of output produced by a firm using a given amount of inputs.
  • What is the average revenue if a firm sells 7 units at a market price of $25?
    Average revenue is $25, since in perfect competition, average revenue equals the market price.
  • Refer to Table 14-4. What is the total revenue from selling 4 units?
    Total revenue from selling 4 units is calculated as Price × 4. The exact value requires the price per unit from the table.
  • In which of the following situations will total revenue increase?
    Total revenue will increase if the price effect outweighs the quantity effect, such as when demand is inelastic and a price increase leads to higher total revenue.
  • Total revenue will rise under which of the following circumstances?
    Total revenue will rise if a price increase leads to a less than proportionate decrease in quantity demanded (inelastic demand).
  • Refer to Figure 5-1. With reference to Graph A, at a price of $10, total revenue equals:
    Total revenue equals $10 multiplied by the quantity sold at that price (TR = $10 × Q).
  • The first graph represents a total revenue curve for Marilyn's Magnificent. What does the curve illustrate?
    The total revenue curve illustrates how total revenue changes as the quantity sold changes, typically showing the relationship between price, quantity, and revenue.
  • Total revenue is best described as:
    Total revenue is the total amount of money received from selling a good, calculated as price times quantity sold.
  • The total revenue received by sellers of a good is computed by:
    Multiplying the price of the good by the quantity sold (TR = P × Q).
  • When is total revenue maximized in relation to the elasticity of demand?
    Total revenue is maximized when demand is unit elastic, meaning that a change in price does not change total revenue.