Revenue Concept

Revenue refers to the income derived by a producer or firm from business activities or from the sale of his or its products. Types Of Revenue Tota Revenue (TR): This refers to the total income which a firm derives from the sale of its products. Total Revenue = Price x Quantity (TR = PxQ)   […]

Revenue refers to the income derived by a producer or firm from business activities or from the sale of his or its products.

Types Of Revenue

Tota Revenue (TR): This refers to the total income which a firm derives from the sale of its products.

Total Revenue = Price x Quantity (TR = PxQ)

 

Average Revenue (A.R): The average revenue is the same as the price per unit of the commodity.  It is derived by dividing the total revenue by the total unit of the commodity sold.

=   = P

 

Marginal revenue: This is the additional income earned by selling an extra unit of a commodity.

Revenue Schedule Of A Firm

Quantity sold (Output)     Total revenue (N)   Average Revenue (Unit Price) N Napinal Revenue (N)

0          0          0          –

1          400     400     400

2          700     350     300

3          900     300     200

4          1040  260     140

5          1150  230     110

6          1200  200     50

The most profitable output is the point where marginal cost is equal to marginal revenue.

Related Posts:

Cost Concept

Production Possibility Curve

Rationing And Hoarding

Price Control/ Legislation

Cross Elasticity Of Demand

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