By now you should understand the graphs for

a) Total Product (b) Average and Marginal Product (c) FC, VC and TC (d) AFC, AVC, ATC, MC 

You should also recognise the ultimate assumption of firms – profit maximising

Now we turn to revenue.


Image: Some rights reserved by saturnism

You now need to:

  • Recap on the difference between perfect competition and monopoly market structures
  • Understand the different equations for cost and the equations for calculating revenue
  • Understand the behaviour of revenue for a monopoly (a price giver acting in imperfect comp) (this includes relevant graphs, trends of graphs and explanations (you might also possibly recognise the role of elasticity)
  • The same as above, but for Perfect Competition
  • Understand the purpose of studying revenue and how relates to previous learning on output / product and costs

First of all, recall the main differences between monopoly and perfect competition:

Now make sure you know the Golden Equations – complete this work sheet before moving on:

Golden Equations MS Word version

Golden Equations Google Doc version – make your own copy before you can edit

Now attempt to complete this spreadsheet worksheet. Take your time – work through it slowly and deliberately. There are two tabs to complete, one for monopoly situation (first) and one for perfect competiton. You might like to research a little to help give as full answers as possible for the text boxes.

Revenues – MS EXCEL version

Once you have checked through your answers to the above, you can review your overall understanding with this video:

Revenue Curves For Firms by pajholden

Finally, you should practice drawing the curves you have learned using the activities above and then try to annotate them with their key features and explanations