CA Foundation · Business Economics · Price Determination in Different Markets
A firm sells 10 units at a price of ₹50 per unit and sells 15 units when it lowers the price to ₹40 per unit. What is the Average Revenue (AR) when 15 units are sold?
Average revenue at 15 units is ₹40, because AR is total revenue divided by quantity sold, which equals the price per unit. Total revenue is 15 × ₹40 = ₹600, and dividing by 15 gives ₹40.
- A₹50
- B₹40Correct
- C₹600
- D₹10
Explanation
Average Revenue equals Total Revenue divided by quantity, which is the price per unit. TR at 15 units = 15 × 40 = ₹600, so AR = 600/15 = ₹40. The figure ₹600 is total revenue, not average revenue.
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