Revenue Definition In Economics

Revenue is a very important concept in economic analysis.

Revenue definition in economics. Revenue refers to the amount received by a firm from the sale of a given quantity of a commodity in the market. It can be calculated by comparing the total revenue generated from a given number of sales e g. It is the total income of a business and is calculated by multiplying the quantity of. The various kinds of revenue will be discussed here under three heads.

In general microeconomic theory assumes that firms attempt to maximize the difference between total revenues and economic costs. Marginal revenue is the additional income generated from the sale of one more unit of a good or service. The revenue concepts are concerned with total revenue average revenue and marginal revenue. Revenue is money brought into a company by its business activities.

A day or a week. Marginal revenue definition. I total revenue ii marginal revenue iii average revenue. Revenue provides the income which a firm needs to enable it to cover its costs of production and from which it can derive a profit.

In the words of dooley the revenue of a firm is its sales receipts or income. Total revenue in economics refers to the total receipts from sales of a given quantity of goods or services. 11 units and the total revenue generated from selling one extra unit i e. Total revenue definition total revenue is the amount of money that a company earns by selling its goods and or services during a period of time e g.

I total revenue tr. Revenue is the income generated from the sale of goods and services in a market average revenue ar price per unit total revenue output the ar curve is the same as the demand curve marginal revenue mr the change in revenue from selling one extra unit of output. The term revenue refers to the income obtained by a firm through the sale of goods at different prices. It is directly influenced by sales level i e as sales increases revenue also increases.

Revenue is also known as sales as in the price to sales ratio an alternative to the price to earnings ratio that uses revenue. Revenue is the income a firm retains from selling its products once it has paid indirect tax such as vat.