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Average Revenue (AR) can be defined as revenue per unit of output. Therefore, from the aforementioned equation, it can be said that AR is the rate at which output is sold, where rate refers to the price of the product. Hence, it can be said that AR is nothing, but price of the product.
Note that if the price is constant, then the average revenue and marginal revenues equal the price. Below is a table of a hypothetical firm, which has a choice of selling quantities ranging from 0 to 130. The product's price is constant at $2. Therefore, average and marginal revenue are $2, as well.For example, at a quantity of 110 units, the total revenue is 110 times $2, or $220. The marginal revenue is the change in total revenue divided by the change in quantity.verage revenue is revenue per product. For example, if your firm's total revenue is $200, and you are selling 100 products, then your average revenue is $200 divided by 100, or $2. Marginal Revenue. Marginal revenue is the additional revenue from selling one more product.