Formula For Revenue Function

However in most other types of market which would be generally called imperfectly competitive markets p depends inversely on q.

Formula for revenue function. The tax revenue in current year depends on income in current year and tax revenue in previous year. Why the sales. Calculating the profit function. Profit r c.

Note we are measuring economic cost not accounting cost. Sales revenue 1 000 x 350 350 000. Y t b 0 b 1 x t b 2 y t 1. For service companies it is calculated as the value of all service contracts or by the number of.

However if the price is 70 dollars the demand is 5000. Regarding the total revenue function only in a perfectly competitive market p is obtained to be a constant independent of the firm s quantity sold q. A sample sales revenue calculation. For service based companies the formula is revenue number of customers x average price of services.

π r c 1 2 q. This is known as the short run tax revenue function. Since profit is the difference between revenue and cost the profit functions the revenue function minus the cost function. The graph shows two points where the linear cost function and the parabolic revenue function intersect.

Essentially the average cost function is the variable cost per unit of 0 30 plus a portion of the fixed cost allocated across all units. Last year we sold 1 000 game consoles for 350 per piece. 5 if you choose to find the output level that maximizes profit by hand use the formula to find the vertex of the profit function p x. Find the revenue function.

The equation for the cost function is. Use 2nd calc intersect to find their coordinates and round to the nearest integer as needed. Graphs of revenue cost and profit functions for ice cream bar business at price of 1 50. C 40 000 0 3 q where c is the total cost.

If the above equation is substituted in the long run linear tax revenue function then we obtain the following equation. After some research a company found out that if the price of a product is 50 dollars the demand is 6000. C 50 0 10 x lemonade 0 50 x cookie. For a product based business the formula is revenue number of units sold x average price.

If every cookie cost 50 cents to make our revenue function becomes. The revenue formula may be simple or complicated depending on the business. The profit function is just the revenue function minus the cost function. In symbols π r c p q f v q.

For our simple lemonade stand the profit function would be.