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JAMB Economics 1988 Question 21

Question 21

Theory of Costs and Revenue

Total revenue is always equal to

  1. A.marginal revenue multiplied by the quantity sold
  2. B.average revenue plus marginal revenue
  3. C.marginal revenue multiplied by marginal cost
  4. D.average revenue multiplied by the quantity sold.
Show the answer and explanation

Answer: D (average revenue multiplied by the quantity sold.)

Explanation

Average revenue is revenue per unit (the price), so total revenue = AR × quantity sold.