Sales Revenue Definition Economics

Sales revenue depends upon the volume of a product sold and the price of the product.

Sales revenue definition economics. Baumol in his book business behaviour value and growth 1967 has presented a managerial theory of the firm based on sales maximisation. Sales can be obtained by multiplying the number of units sold by the company during the year with the selling price of the product. In a company s profit and loss account sales revenue is generally recorded net of vat and any trade discounts given for subsequent comparison with costs. Usually sales are the net sales that the firm achieves minus the cost of returned merchandise.

Collins dictionary of business 3rd ed. Sales revenue the income generated from the sale of goods and services. The revenue generated from the sale of goods and services is known as sales revenue. Revenue in economics the income that a firm receives from the sale of a good or service to its customers.

Average revenue ar price per unit total revenue output. The objective of maximising sales revenue rather than profits was developed by economist william baumol whose work focused on the decisions of manager controlled businesses. Marginal revenue mr the change in revenue from selling one extra unit of output. Sales revenue is the income that a firm realizes from selling its products or services to the public.

Technically revenue is calculated by multiplying the price p of the good by the quantity produced and sold q in algebraic form revenue r is defined as r p q. Total revenue tr price per unit x quantity. The table below shows the demand for a product where there is a. Maximising total revenue revision video his research found that annual salaries and perks were more closely linked to sales.

The ar curve is the same as the demand curve. Revenue is the income generated from the sale of goods and services in a market. In accounting the terms sales and revenue can be and often are used interchangeably to mean the same thing. The below mentioned article provides an overview on baumol s sales or revenue maximisation.

Revenue does not necessarily mean cash received. It includes both cash sales and credit sales. Sales revenue refers to the income generated by any business entity by selling their goods or by providing their services during the normal course of its operations and it is reported annually quarterly or monthly as the case may be in the income statement profit loss account of the business entity. A static model and a dynamic model.

He discusses two models of sales maximisation.