The Revenue Function Of A Product
After some research a company found out that if the price of a product is 50 dollars the demand is 6000.
The revenue function of a product. R p x. If we assume ice cream bars will be sold for 1 50 apiece the equation for the revenue function the product of the price per unit times the number of units sold. Last year we sold 1 000 game consoles for 350 per piece. R 1 5 q.
R revenue p price per unit x number of units sold. For service based companies the formula is revenue number of customers x average price of services. For a product based business the formula is revenue number of units sold x average price. However if the price is 70 dollars the demand is 5000.
Calculating the revenue function. Sales revenue 1 000 x 350 350 000. 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. In a case where a business sells one kind of product or service revenue is the product of the price per unit times the number of units sold.
If one type of product is being sold at one price the revenue function is simply.