Meaning of Monopoly

Monopoly

In monopoly market, there is only one seller for any particular things and there is no alternative product or thing available in the market. In this market, one firm is equal to the whole industry so the demand curve is same & have a stable demand. In this market, supplier knows the customer interest and income level. In this market, the cross elasticity of product is zero.

Monopoly

Average revenue (AR) is the demand curve in monopoly market because it is a rectangular hyperbola. In this market, a supplier control one thing either production or price.

If supplier select price “P” so selling quantity “Q” will be decided by customer. If a seller selects the “Q” level of production then “OP” price decide by the consumer.

Different types of Revenue

Different types of Revenue

Every company starts its business to earn profit. For this, a company manufactures different types of goods & services and sells in the market. In the production process, a company spent lot of expenses and after selling, a company earns revenue. So revenue is an important part of a business because excess revenue over expenditure is the profit of a company.

Different types of Revenue

Types of revenue –

Total Revenue – a company sells its all goods & services at a price, the amount that a company gets after selling all its goods & services that are called total revenue. For example – if a company manufacturing 100 units and sell at a price of 5 per units so total revenue is R= p*q (100*5=500)

Average Revenue – if a company divides its total revenue by the total manufacturing quantity, we get the average revenue. Like revenue/quantity or (R/Q or 500/5= 100). 100 is our average revenue.

Marginal Revenue – every increase in the revenue by increasing the selling quantity of goods and services, we call it marginal revenue.