Google
Thursday 
December 2, 2021 

AmosWEB means Economics with a Touch of Whimsy!

AmosWEBWEB*pediaGLOSS*aramaECON*worldCLASS*portalQUIZ*tasticPED GuideXtra CrediteTutorA*PLS
POINT ELASTICITY: The relatively responsiveness of a change in one variable (call it B) to an infinitesimally small change in another variable (call it A). The notion of point elasticity typically comes into play when discussing the elasticity at a specific point on a curve.< P>Point elasticity can be calculated in a number of different ways. Sophisticated economists, using sophisticated mathematical techniques (better known as calculus) can calculate point elasticity by taking derivatives of equations. Derivatives is fancy calculus talk for infinitesimally small changes.

Visit the GLOSS*arama


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
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.

<= AVERAGE REVENUE PRODUCT AND MARGINAL REVENUE PRODUCTAVERAGE TOTAL COST =>


Recommended Citation:

AVERAGE REVENUE PRODUCT CURVE, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2021. [Accessed: December 2, 2021].


Check Out These Related Terms...

     | average revenue product | average physical product | total physical product curve | marginal revenue product | marginal revenue product curve | marginal productivity theory | total physical product | marginal physical product |


Or For A Little Background...

     | factor market analysis | short-run production analysis | average product | average revenue | total product | total revenue | production function | law of diminishing marginal returns | production | production cost | marginal analysis | factors of production | marginal returns |


And For Further Study...

     | derived demand | average factor cost | average factor cost curve | mobility | monopsony | bilateral monopoly | factor demand | factor demand curve | factor demand elasticity |


Search Again?

Back to the WEB*pedia


APLS

RED AGGRESSERINE
[What's This?]

Today, you are likely to spend a great deal of time looking for a downtown retail store looking to buy either a how-to book on fine dining or a coffee cup commemorating the first day of winter. Be on the lookout for the happiest person in the room.
Your Complete Scope

This isn't me! What am I?

The standard "debt" notation I.O.U. does not mean "I owe you," but actually stands for "I owe unto..."
"A ship ought not to be held by one anchor, nor life by a single hope. "

-- Epictetus, philosopher

T-BOND
Treasury Bond
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 ©2000-2021 AmosWEB*LLC
Send comments or questions to: WebMaster