I have a very simple question, what is the meaning, if any, of this?

I.e. Economically what does the following calculation mean?

$$ \left(\frac{(Q1\cdot P1)+(Q2\cdot P2)+(Q3\cdot P3)}{Q1 + Q2 + Q3}\right) $$

Consider the values being in a table like the one shown below:

$$ \begin{array}{c|lcr} n & \text{Factory A Generation of good x} & \text{Factory B Generation of good x} & \text{Market price for good x} \\ \hline 1 & Q1 & Q1 & P1 \\ 2 & Q2 & Q2 & P2 \\ 3 & Q3 & Q3 & P3 \end{array} $$

Thank you!

  • $\begingroup$ The previous answer is correct. You can also say that this is the average cost per item produced as Q *P = Cost of production. Where as costs= revenue , theoretically speaking. $\endgroup$
    – Mike J
    Commented Feb 6, 2019 at 14:59

1 Answer 1


Note that $Q_i P_i$ is the total revenue from good $i$. So dividing total revenue from all goods by the amount produced of all of them should give us something like "average revenue per item produced"?


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