Economics Short Run Vs Long Run Costs Questions
Average revenue in the long run refers to the total revenue earned by a firm per unit of output over a period of time when all inputs can be adjusted. In the long run, a firm has the flexibility to change its scale of production by adjusting its inputs such as labor, capital, and technology. As a result, the average revenue in the long run is influenced by the firm's ability to optimize its production process and achieve economies of scale. It is calculated by dividing the total revenue by the quantity of output produced in the long run.