Define the following terms completely and concisely.
a. Marginal revenue
b. Average revenue
c. Optimal decision
d. Satisficing
e. Marginal profit
What will be an ideal response?
a. Marginal revenue is the addition to total revenue resulting from the addition of one unit to total output. Marginal revenue, in geometrical terms, is the slope of the total revenue curve.b. Average revenue is total revenue divided by quantity. The average revenue curve is another name for the demand curve.c. An optimal decision is one which, among all the decisions that are actually possible, is best for the decision maker.d. Satisficing is making decisions that are satisfactory, given the amount of information available, but which may in reality not be the best decisions if all facts were known. The cost of data gathering is thought to force business and government to satisfice.e. Marginal profit is the additional profit resulting from the sale of one additional unit of output.
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