Lesson Plan

• Describe the concept of revenue maximisation and its decision rule (MR = 0).
• Explain how marginal revenue relates to total revenue and identifies the revenue‑maximising output.
• Compare revenue maximisation with profit maximisation in short‑run and long‑run contexts.
• Analyse the implications of revenue‑maximising behaviour for firms and for government policy.
• Apply the MR = 0 rule to a simple demand‑MR‑TR diagram.

• Projector or interactive whiteboard
• Slide deck with demand, MR and TR diagrams
• Handout summarising formulas and key comparisons
• Calculator or spreadsheet for quick MR calculations
• Whiteboard markers and erasers

Begin with a quick poll: “If a firm could increase its sales revenue without worrying about costs, what would it do?” Connect this to students’ prior knowledge of profit maximisation. State that today they will be able to identify the revenue‑maximising output and evaluate its consequences.

1. Do‑now (5’): Students calculate total revenue for a given price‑quantity table and plot a brief TR curve.
2. Mini‑lecture (10’): Introduce the MR = 0 rule, show the demand, MR and TR curves, and explain the revenue‑maximising output.
3. Guided practice (12’): In pairs, students use a spreadsheet to vary Q, compute MR and locate where MR turns zero; they annotate the diagram.
4. Comparison activity (8’): Complete a Venn diagram contrasting revenue vs. profit maximisation (short‑run and long‑run implications).
5. Policy discussion (10’): Analyse a short case of a regulated utility; decide which policy tool (price cap or performance‑based regulation) would curb revenue‑maximising behaviour.
6. Check for understanding (5’): Quick quiz on the decision rules (MR = 0 vs. MR = MC) using clicker or hand‑raise.

Recap the MR = 0 condition and its diagrammatic representation. Ask students to write one sentence on the main advantage and one limitation of revenue maximisation as an exit ticket. For homework, assign a short problem set requiring students to determine the revenue‑maximising output for different demand functions.