Google
Thursday 
May 19, 2022 

AmosWEB means Economics with a Touch of Whimsy!

AmosWEBWEB*pediaGLOSS*aramaECON*worldCLASS*portalQUIZ*tasticPED GuideXtra CrediteTutorA*PLS
ORDINAL UTILITY: A method of analyzing utility, or satisfaction derived from the consumption of goods and services, based on a relative ranking of the goods and services consumed. With ordinal utility, goods are only ranked only in terms of more or less preferred, there is no attempt to determine how much more one good is preferred to another. Ordinal utility is the underlying assumption used in the analysis of indifference curves and should be compared with cardinal utility, which (hypothetically) measures utility using a quantitative scale.

Visit the GLOSS*arama


AVERAGE REVENUE CURVE, MONOPOLY:

A curve that graphically represents the relation between average revenue received by a monopoly for selling its output and the quantity of output sold. Because average revenue is essentially the price of a good, the average revenue curve is also the demand curve for a monopoly's output.
Monopoly is a market structure with a single firm selling a unique good. As the only firm in the market, monopoly is a price maker and has extensive market control, facing a negatively-sloped demand curve. If a monopoly wants to sell a larger quantity, then it must lower the price.

The average revenue curve reflects the degree of market control held by a firm. For a perfectly competitive firm with no market control, the average revenue curve is a horizontal line. For firms with market control, especially monopoly, the average revenue curve is negatively-sloped.

Average Revenue Curve,
Medicine Style
Average Revenue Curve, Monopoly
The average revenue curve for Feet-First Pharmaceutical is displayed in the exhibit to the right. Key to this curve is that Feet-First Pharmaceutical is a monopoly provider of Amblathan-Plus and thus faces a negatively-sloped demand curve. Larger quantities of output are only possible with lower prices.

The vertical axis measures average revenue and the horizontal axis measures the quantity of output (ounces of medicine). Although quantity on this particular graph stops at 12 ounces of medicine, it could go higher.

This curve indicates that if Feet-First Pharmaceutical sells 1 ounce of medicine (at $10 per ounce), then average revenue is $10 per ounce. Alternatively, if it sells 10 ounces (at $5.50 per ounce), then average revenue in is $5.50 per ounce. Should it sell 12 ounces (at $4.50 per ounce), then average revenue is $4.50 per ounce.

For Feet-First Pharmaceutical the average revenue curve is also the demand curve. The curve is negatively sloped, meaning that larger quantities of output result in less average revenue.

Although this average revenue curve, and preceding table of average revenue numbers, is based on the production activity of Feet-First Pharmaceutical, a well-known monopoly firm, they apply to any firm with market control. Monopolistic competition and oligopoly firms that also face negatively-sloped demand curves generate comparable average revenues.

<= AVERAGE REVENUE CURVE, MONOPOLISTIC COMPETITIONAVERAGE REVENUE CURVE, PERFECT COMPETITION =>


Recommended Citation:

AVERAGE REVENUE CURVE, MONOPOLY, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2022. [Accessed: May 19, 2022].


Check Out These Related Terms...

     | average revenue | average revenue, monopoly | average revenue curve, perfect competition | average revenue curve, monopolistic competition | total revenue curve, monopoly | marginal revenue curve, monopoly | average total cost curve | average product curve |


Or For A Little Background...

     | price | market structures | monopoly | monopoly characteristics | monopoly, demand | perfect competition | oligopoly | monopolistic competition | demand | demand price | law of demand |


And For Further Study...

     | short-run production analysis | short-run analysis, monopoly | long-run analysis, monopoly | monopoly, efficiency | monopoly, breakeven output | profit curve, monopoly | short-run production alternatives, monopoly | monopoly, profit maximization |


Related Websites (Will Open in New Window)...

     | U.S. Chamber of Commerce | Better Business Bureau | Small Business Administration |


Search Again?

Back to the WEB*pedia


APLS

BLUE PLACIDOLA
[What's This?]

Today, you are likely to spend a great deal of time searching for rummage sales seeking to buy either a computer that can play video games and burn DVDs or a black duffle bag with velcro closures. Be on the lookout for mail order catalogs with hidden messages.
Your Complete Scope

This isn't me! What am I?

The first U.S. fire insurance company was established by Benjamin Franklin in 1752 in Philadelphia.
"Perhaps the most valuable result of all education is the ability to make yourself do the thing you have to do, when it ought to be done, whether you like it or not; it is the first lesson that ought to be learned; and however early a man's training begins, it is probably the last lesson that he learns thoroughly. "

-- Thomas H. Huxley, Scientist

TOCOM
Tokyo Commodity Exchange (Japan)
A PEDestrian's Guide
Xtra Credit
Tell us what you think about AmosWEB. Like what you see? Have suggestions for improvements? Let us know. Click the User Feedback link.

User Feedback



| AmosWEB | WEB*pedia | GLOSS*arama | ECON*world | CLASS*portal | QUIZ*tastic | PED Guide | Xtra Credit | eTutor | A*PLS |
| About Us | Terms of Use | Privacy Statement |

Thanks for visiting AmosWEB
Copyright ©2000-2022 AmosWEB*LLC
Send comments or questions to: WebMaster