Concept of Revenue
Concept Of Revenue Revenue is the amount of money received by a firm by the sale of its output in the market or we can say that the payments received by an entrepreneur from the sale of the goods produced is known as revenue. If the firm sells 100 pens at the price of Rs.10 each during a week, his total revenue during that week equals Rs. 10 × 100 = Rs. 1,000. Revenue= Cost+Profit There are three concepts of revenue- Total revenue, Marginal revenue, Average revenue. Total Revenue Total Revenue refers to the total amount of money received by a firm from the sale of its products produced over a given period of time. By selling 1,000 units of a pen at the rate of Rs.10 each, the total revenue a firm receives is 1,000 ×Rs 10 = Rs. 10,000. Thus, TR = Q × P, where Q is the total quantity sold and P is the price per unit. Average Revenue Average revenue is obtained by dividing total revenue received by the total number of units sold by a firm. It refers to re...