Average revenue is the same as market price of the commodity.

Question

Defend or refute the statement. Write ‘yes’ or ‘no’ with reason:

Average revenue is the same as market price of the commodity.

Answer 1

Yes. We know that:

We also know that TR = P.Q (Where P = Price, and Q = Quantity or Output sold.) Relating the two equations, we can write that:

Thus, it is proved that AR = Price.