Revenue Equation In Terms Of Demand

For service based companies the formula is revenue number of customers x average price of services.

Revenue equation in terms of demand. For a product based business the formula is revenue number of units sold x average price. A sample sales revenue calculation. Last year we sold 1 000 game consoles for 350 per piece. Why the sales.

Find the revenue function. The revenue function shows the maximum income a firm can obtain from selling a given quantity of its. Demand can be measured in terms of volume quantity bought and or value value of sales factors affecting the. Revenue is the amount value of a product that customers actually buy from a business.

When we compare this example inverse demand curve top and the resulting marginal revenue curve bottom we notice that the constant is the same in both equations but the coefficient on q is twice as large in the marginal revenue equation as it is in the demand equation. However if the price is 70 dollars the demand is 5000. Find the maximum revenue for the demand equation eq q 5x 130 eq. Demand is the amount of a product that customers are prepared to buy.

Then you will need to use the formula for the revenue r x p x is the number of items sold and p is the price of one item.