(i) Total Revenue: The total revenue is the aggregate revenue received by the seller from the sale of the entire output. It is obtained by multiplying the units sold with the price of the product. It may be stated as follows: TR = p x q where, p is price and q is quantity sold.
(ii) Average Revenue: It refers to the revenue per unit of output sold. It is obtained by dividing the total revenue by the number of units of output sold. Under perfect competition, AR will be equal to the market price. This is because, in perfect competitive market, the seller sells his product at the same price which is prevailing in the market. If the seller sells at low price, he incurs losses or if he increases the price, he loses customers.)
