The relationship among AR, MR and elasticity of demand (e) is stated as follows. MR = AR.( e^-1/e)
The relationship between the AR curve and MR curve depends upon the elasticity of AR curve (AR = DD = Price).
(i) When price elasticity of demand is greater than one, MR is positive and TR is increasing.
(ii) When price elasticity of demand is less than one, MR is negative and TR is decreasing.
(iii) When price elasticity of demand is equal to one, MR is equal to zero and TR is maximum and constant.
It is to be noted that, the output range of 1 to 5 units, the price elasticity of demand is greater than one according to total outlay method. Hence, TR is increasing and MR is positive.
At the output range of 5 to 6 units, the price elasticity of demand is equal to one. Hence, TR is maximum and MR equals to zero.
At the output range of 6 units to 10 units, the price elasticity of demand is less than unity. Hence, TR is decreasing and MR is negative.

Total Revenue:
Total revenue is the amount of income received by the firm from the sale of its products. It is obtained by multiplying the price of the commodity by the number of units sold.
TR = p x Q
where, TR denotes Total Revenue, P denotes Price and
Q denotes Quantity sold.
For example, a cell-phone company sold 100 cell-phones at the price of t500 each. TR is
Rs.50,000. (TR= 500 x 100 = 50,000).
Total Revenue - Constant Price

When price is constant, the behaviour of TR is shown in the table and the diagram, assuming P = 5. When P = 5; TR = PQ
When price is declining with increase in quantity sold. (Eg. Imperfect Competition on the goods market) the behaviour of TR is shown in the table and in the diagram. TR can be obtained from Demand function: If Q = 11-P, When P = 1, Q = 10

Total Revenue - Price declining

TR = PQ = 1 x 10 = 10
When P = 3, Q = 8, TR = 24
When P = 10, Q = 1, TR = 10

Total Cost:
Total cost means the sum total of all payments made in the production. It is also called as total cost of production.
TC = TFC + TYC
For example, when the total fixed cost is Rs.1000 and the total variable cost is Rs. 200 then the total cost is Rs.1200 (Rs.1000 + Rs.200)
IF TFC = 12 and
TYC = Q3 -18Q2 + 91Q
TC = 12 + Q3 - 18Q2 + 91Q

It is to be noted that,
a) The TC curve is obtained by adding TFC + TVC curves vertically.
b) TFC curve remains parallel to x-axis indicating a straight line.
c) TVC starts from the organ and move upwards as no variable cost is incurred at zero output.
d) When TFC + TVC are added, TC starts from TFC and move upwards.
e) TC curve lies above the TVC curve.
f) TVC and TC curves are the same shapes but beginning point is different.

Relationship among TR, AR, MR Curves:
When marginal revenue is positive, total revenue rises, when MR is zero, the total revenue becomes maximum. When marginal revenue becomes negative, total revenue starts falling. When AR and MR both are falling, then MR falls at a faster rate than AR.
TR, AR, MR and Elasticity of Demand:
The relationship among AR, MR and elasticity of demand (e) is stated as follows.
MR = AR (e-i/e)
The relationship between the AR curve and MR curve depends upon the elasticity of AR curve (AR = DD = Price).
a) When price elasticity of demand is greater than one, MR is positive and TR is increasing.
b) When price elasticity of demand is less than one, MR is negative and TR is decreasing.
c) When price elasticity of demand is equal to one, MR is equal to zero and TR is maximum and constant.
It is to be noted that, the output range of 1 to 5 units, the price elasticity of demand is greater than one according to total out by method. Hence TR is increasing and MR is positive.
TR, AR, MR & Elasticity

At the output range of 5 to 6 units, the price elasticity of demand is equal to one. Hence TR is maximum and MR equals to zero.
At the output range of 6 units to 10 units, the price elasticity of demand is less than unity. Hence TR is decreasing and MR is negative.

TC = TFC + TVC
\(AVC=\frac{TVC}{Q}\)
\(AFC=\frac{TFC}{Q}\)
\(AC=\frac{TC}{Q}\)
(i) TC = 100 + Q³. Total cost has two components TFC and TVC.
(ii) TFC = is the total fixed cost which does not change with the level of output.
(iii) It is determined by putting the value of Q.
(iv) Given the total cost function T = 100+Q³
Q = units of output where Q = 10
Here TFC = 100 (TFC will not change with output changes)
TC 100 + (10)³
= 100 + 1000
TC = 1100
\(\therefore\)1100 = 100 + TVC
1100 - 100 = TVC
\(\therefore\)TVC = 1000
TVC = 1000, TC = 1100  \(\therefore\) TFC =?
TC = TFC + TVC
1100 = TFC + 1000
1100 - 1000 = TFC
\(\therefore\)TFC = 100
\(AFC=\frac{TFC}{Q}\)
TFC = 100, Q = 10
\(\therefore\) AFC = 10
\(AFC=\frac{TFC}{Q}\)
TVC = 1000, Q = 10
\(\therefore\) AVC = 100
\(AC=\frac{TC}{Q}\)
TC = 1100, Q = 10
\(\therefore\) AC = 110
or
AC = AFC + AVC
AFC = 10, AVC = 100
AC = 10 + 100
\(\therefore\) AC = 110