Diagram 10.1 Dow nw ard Sloping De m and Curve 500 50 400 350 300 250 p=500·2q 200 150 100 50 100 25150175200 250 q-units of output
a(b)The Total Revenue Curve a TR= price x quantity pq Table 10.1 Evaluation of selected points TR 0 500 20 460 9200 30 440 13200 40 420 16800 200 100 20000 210 80 16800 220 60 13200 250 0 0
◼ (b) The Total Revenue Curve ❑ TR = price x quantity = pq
( TR starts at O when q equals O ii TR initially increases as q increases, but then decreases as q increases (iiTR equals 0 again, when q equals 250 a tR curve is not a straight line(nolinear equation tR=pxq=(500 -2q)q =500q-2q QUADRATIC equation
◼ (i) TR starts at 0 when q equals 0 ; ◼ (ii) TR initially increases as q increases , but then decreases as q increases ◼ (iii) TR equals 0 again , when q equals 250. ❑ TR curve is not a straight line (nolinear equation) ◼ TR = p x q = ( 500 - 2q ) q = 500q - 2q2 ◼ QUADRATIC equation
Diagram 10.2 Total Re ve nue curve 00 28000 TR=(500-2q 24000 20000 16000 12000 8000 4000 0 0255075100125150175200225250 q· units of output
a TR information is available from both types of diagrams but it comes in different ways for a demand curve diagram the tr associated with any particular output level is given by the area of the appropriate rectangle for a tR type diagram, the tR value for any output level is given simply by the height of the curve at that output level
❑ TR information is available from both types of diagrams but it comes in different ways : ◼ for a demand curve diagram , the TR associated with any particular output level is given by the area of the appropriate rectangle ; ◼ for a TR type diagram , the TR value for any output level is given simply by the height of the curve at that output level