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POTENTIAL GROSS DOMESTIC PRODUCT: The total output that the economy could produce if resources were at full employment. If the economy is at full employment (a 5 percent unemployment rate) then actual gross domestic product is equal to potential gross domestic product. Of course, if the unemployment rate is greater than 5 percent, then actual production is less potential production. By calculating potential gross domestic product, we can figure out exactly how far below this potential we are. This information then can be used by the pointy-headed government economists to recommend appropriate monetary or fiscal policies.
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                           AVERAGE REVENUE PRODUCT CURVE: A curve that graphically illustrates the relation between average revenue product and the quantity of the variable input, holding all other inputs fixed. This curve indicates the per unit revenue at each level of the variable input. The average revenue product curve is one of two related curves often used in the analysis of factor demand. The other, and more important, is marginal revenue product curve. The average revenue product curve indicates how average revenue product is related to the quantity of a variable input used in production. While the analysis of factor markets tends to focus on labor as the variable input, a average revenue product curve can be constructed for any input.| Average Revenue Product Curve |  |
This diagram graphically represents the relation between average revenue product and the variable input. This particular curve is derived from the hourly production of Super Deluxe TexMex Gargantuan Tacos (with sour cream and jalapeno peppers) as Waldo's TexMex Taco World restaurant employs additional workers. The number of workers, measured on the horizontal axis, ranges from 0 to 10 and the average revenue product, measured on the vertical axis, ranges from $0 to $60.The shape of this average revenue product curve is most important. For the first two workers of variable input, average revenue product increases. This is reflected in a positive slope of the average revenue product curve. After the third worker, average revenue product declines. This is seen as a negative slope. While average revenue product continues to decline, it never reaches zero nor becomes negative. To do so requires total revenue to become zero and negative, which just does not happen. The hump-shape of the average revenue product curve is indirectly caused by increasing and decreasing marginal returns. The upward-sloping portion of the average revenue product curve, up to the second worker, is indirectly due to increasing marginal returns. The downward-sloping portion of the average revenue product curve, after the third worker, is indirectly due to decreasing marginal returns. and the law of diminishing marginal returns.
Recommended Citation:AVERAGE REVENUE PRODUCT CURVE, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2025. [Accessed: April 25, 2025].
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ORANGE REBELOON
[What's This?]
Today, you are likely to spend a great deal of time looking for a downtown retail store trying to buy either a case of blank recordable DVDs or a pair of red goulashes with shiny buckles. Be on the lookout for slightly overweight pizza delivery guys.
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The word "fiscal" is derived from a Latin word meaning "moneybag."
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"The greatest things ever done on Earth have been done little by little. " -- William Jennings Bryan
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ARIMA
Autoregressive Integrated Moving Average
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