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TOTAL REVENUE, MONOPOLY: The revenue received by a monopoly firm for the sale of its output. Total revenue is one of two parts a monopoly needs for the calculation of economic profit, the other is total cost. In general, total revenue is the price received for selling a good times the quantity of the good sold at that price. Because a monopoly completely controls its market and faces a negatively-sloped demand curve, it charges a different price for a given quantity. If a monopoly sells a relatively small quantity, it charges a relatively high price. If it sells a relatively smaller quantity, it charges a relatively lower price. However, once the monopoly determines its' price/quantity combination, total revenue calculation is relatively straightforward, multiply the price times the quantity.

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NOVEL INFORMATION:

Information received by the five senses (sight, sound, taste, touch, and smell) that is new, different, and unusual. Because novel information has the potential to be threatening it triggers an automatic response through what is commonly termed the "fight or flight" reaction. Novel information is evaluated in contrast to redundant information, which is familiar and presumably nonthreatening.
Novel information is new information. An unusual sight. A strange sound. An unexpected touch. A bizarre taste. An uncommon smell. The human brain takes immediate note of this information. Because it is unfamiliar, it might be threatening. This is information that needs to be identified quickly. It needs to stand out from the ordinary and familiar. A self-preservation reaction (fight or flight) might be needed.

Redundant information, in contrast, is familiar information. A common sight. A routine sound. A ordinary touch. A recognized taste. An everyday smell. The human brain is wired to largely ignore this information. Because it is familiar, it is not threatening. It is the background canvas upon which novel information is displayed.

Fight or Flight

An understanding of novel information is intertwined with the fundamental, physiological response to potential threat, what is called fight or flight. The human body automatically prepares itself to fight off a potential threat or to flee away from it. Respiration increases. Pupils dilate. Brain wave activity increases. Adrenalin is pumped through the body. Heart rate increases. The human body is primed and ready to recognize the threat and to respond.

The key to this automatic response is achieved by distinguishing between what's new and different and what's old and familiar. The old and familiar is less threatening than the new and different. The human brain sorts between novel and redundant information that comes through the five senses (sight, hearing, touch, taste, and smell), attempting to discern the potential for danger.

Enjoyment Abounds

Redundant and novel information are both intrinsically satisfying. A little bit of excitement is satisfying (think a roller coaster ride). But so too is a little bit of piece and quiet (think resting after a hectic vacation). However, nothing but redundant information is incredibly boring and not particularly satisfying. And nothing but novel information is anxiety inducing, and also not very satisfying. Too much of one or the other is not a pleasant situation. A combination of the two is most enjoyable. It can maximize satisfaction.

However, different people have different preferences over the proper mix of novel and redundant information. Some prefer relatively more new and less old. Others prefer relatively more old and less new.

These individual differences give rise to entrepreneurial and managerial behavior. Those who prefer relatively more redundant information and relatively less novel information tend to pursue managerial behavior. Others who prefer relatively more novel information and relatively less redundant information tend to pursue entrepreneurial (and innovative) behavior.

Entrepreneurial Behavior

Entrepreneurial behavior is based in large part on the satisfaction generated by, and relative preference for, novel information. Those who are pleased by the new and different tend to pursue entrepreneurial behavior.

Entrepreneurial behavior is a preference for changing the status quo over maintaining it. Entrepreneurial types embrace innovation. A change in institutions generates satisfaction for the entrepreneurially inclined. Keeping things structured and orderly is not nearly as satisfying. Entrepreneurial behavior has a relative preference for novel information over redundant information.

This behavior alternative surfaces throughout society. The most noted is entrepreneurship, which launches a new business and undertakes the risk of organizing production. Another common example of entrepreneurial behavior is a consumer who likes to buy the newest and latest products, fashions, or electronic equipment. The desire to take a new route to work or school periodically is also an example. At the extreme are those who rebel against existing social orders, including political revolutionaries.

Entrepreneurial behavior is reflected in those who invent new products, ideas, technologies, and organizations. The desire to create something new is fundamental to entrepreneurial types. It is also reflect in those who seek to innovate, to apply and make use of the new products, ideas, technologies, and organizations. This behavior also affects those most willing to adopt the innovations developed by others.

However, once the newness wears off of an innovation, once the "new" innovation becomes the status quo, once it is institutionalized, then entrepreneurial types want little further involvement. The excitement of the new and different has passed.

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Recommended Citation:

NOVEL INFORMATION, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2024. [Accessed: July 24, 2024].


Check Out These Related Terms...

     | redundant information | behavioral alternatives | managerial behavior | entrepreneurial behavior | innovation | institution | innovation profit | technology | process innovation | product innovation |


Or For A Little Background...

     | entrepreneurship | risk | scarce resources | rational behavior |


And For Further Study...

     | economics of information | economics of uncertainty | risk preferences | alternative business cycles | creative destruction | good types | public goods | innovation and entrepreneurship | political views |


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