Revenue (A level BS)
From WikiTextbook
A firm’s revenue is calculated using the following formula:
- volume of goods sold x average selling price
A business wanting to increase its revenue could raise the price or sell more units. Remember that raising the price of an elastic good will lead to a reduction in revenue and raising the price of an inelastic good will lead to an increase in revenue.
Firms will often adopt one of two approaches:
- Sell at a low price hoping to attract a high level of sales.
- Sell at a high price in order to maximise the revenue from the items sold.
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