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SAVINGS ACCOUNTS: Accounts maintained by banks, savings and loan associations, credit unions, and mutual savings banks that pay interest but can not be used directly as money. These accounts, also termed transactions deposits, let customers set aside a portion of their liquid assets that COULD be used to make purchases. But to make those purchases, savings account balances must be transferred to checkable deposits or currency. However, this transference is easy enough that savings accounts are often termed near money. Savings accounts, as such constitute a sizeable portion of the M2 monetary aggregate.
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                           AVERAGE REVENUE CURVE, PERFECT COMPETITION: A curve that graphically represents the relation between average revenue received by a perfectly competitive firm 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 perfectly competitive firm's output. Perfect competition is a market structure with a large number of small firms, each selling identical goods. Perfectly competitive firms have perfect knowledge and perfect mobility into and out of the market. These conditions mean perfectly competitive firms are price takers, they have no market control and receive the going market price for all output sold.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,
Zucchini Style |  |
Average revenue is commonly represented by an average revenue curve, such as the one displayed in the exhibit to the right. This particular average revenue curve is that for zucchini sales by Phil the zucchini grower, a presumed perfectly competitive firm. The vertical axis measures average revenue and the horizontal axis measures the quantity of output (pounds of zucchinis). Although quantity on this particular graph stops at 10 pounds of zucchinis, the nature of perfect competition indicates it could easily go higher. This curve indicates that if Phil sells 1 pound of zucchinis, then his revenue per unit is $4. However, if he sells 10 pounds, then he also receives $4 of average revenue. Should he sell 100 pounds, then he moves well beyond the graph, but his average revenue remains at $4. The average revenue curve is actually the demand curve for Phil's zucchinis. In fact, in the same way that average revenue is just another term for price, the average revenue curve is just another term for demand curve.
Recommended Citation:AVERAGE REVENUE CURVE, PERFECT COMPETITION, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2019. [Accessed: August 21, 2019].
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Today, you are likely to spend a great deal of time looking for the new strip mall out on the highway wanting to buy either a T-shirt commemorating the first day of spring or a coffee cup commemorating last Friday (you know why). Be on the lookout for gnomes hiding in cypress trees.
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In the early 1900s around 300 automobile companies operated in the United States.
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"Success is going from failure to failure without a loss of enthusiasm. " -- Winston Churchill, British statesman
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WFTU
World Federation of Trade Unions
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