Average Revenue
Plain definition
Total revenue divided by the quantity sold — revenue per unit, which always equals the price of the good (AR = TR ÷ Q = P).
In economics
Average revenue is simply another name for the demand curve facing the firm: since TR = P × Q, dividing by Q always gives P. In perfect competition AR is a horizontal line at the market price; under monopoly it slopes downward with market demand.
Example
If total revenue is 25 — exactly the price per unit.
Common confusion
Average revenue is confused with marginal revenue. AR is always the price; MR is the extra revenue from one more unit, which falls below price for a firm with market power. Under perfect competition only, AR = MR = price.