Question

Average Revenue equals to

• A. Total revenue divided by the quantity produced
• B. Price
• C. Both (A) and (B)
• D. None of these

Hint:

Average Revenue (AR) is just a fancy economic term for the Price per unit.

Answer 1

The Correct Option is C

Average Revenue (AR) is defined by its name: the average revenue per unit.

By definition, \( AR = \frac{\text{Total Revenue (TR)}}{\text{Quantity (Q)}} \). So, (A) is correct.
We also know that \( TR = \text{Price (P)} \times \text{Quantity (Q)} \).
Substituting this into the AR definition: \( AR = \frac{P \times Q}{Q} = P \). So, (B) is also correct.
Since both statements are correct, the answer is (C).