Ad Code

What is revenue? Explain the concept of Total Revenue, Average Revenue and Marginal Revenue

 

What is revenue?

Revenue is the income that a business or organization generates from the sale of goods or services. It is the amount of money that a company receives in exchange for the goods or services it provides. Revenue is the top line item on an income statement and is an important metric for measuring a company's financial performance.

There are several ways to calculate revenue, but the most common method is to multiply the number of goods or services sold by the price at which they were sold. For example, if a business sells 100 units of a product for $10 each, its revenue would be $1,000 (100 x $10).

Revenue can also be classified into different categories, such as:

Operating revenue: This is revenue generated from the company's main business activities.

Non-operating revenue: This is revenue generated from activities that are not part of the company's main business, such as investments or rental income.

Revenue is a key indicator of a company's financial health and growth potential. It is used to measure a company's performance over time and to compare it to other companies in the same industry. Understanding revenue trends is important for investors and analysts to evaluate the company's financial stability and potential for future growth.


Explain the concept of Total Revenue, Average Revenue, and Marginal Revenue

 Total Revenue (TR) is the total amount of money that a business receives from the sale of its goods or services. It is calculated by multiplying the quantity of goods or services sold by the price at which they were sold. For example, if a business sells 100 units of a product for $10 each, its total revenue would be $1,000 (100 x $10).

Average Revenue (AR) is the revenue per unit of output. It is calculated by dividing total revenue by the number of goods or services sold. Average Revenue can be thought of as the price of a unit of output. For example, if a business sells 100 units of a product for $1,000, its average revenue would be $10 per unit (1,000/100 = 10).

Marginal Revenue (MR) is the change in total revenue resulting from the sale of one additional unit of output. It is calculated by taking the change in total revenue and dividing it by the change in the number of units sold. Marginal revenue is important because it represents the additional revenue that a business earns by selling one more unit of output. It is used to determine the optimal level of production and pricing.

It's important to note that the relationship between the Total revenue, Average Revenue and Marginal revenue are:

TR = P*Q (Total Revenue = Price * Quantity)

AR = TR/Q (Average Revenue = Total Revenue / Quantity)

MR = ∆TR/∆Q (Marginal Revenue = Change in Total Revenue / Change in Quantity)

In some cases, when a company is a price taker, the MR is equal to the price (AR) but in most cases it is less than the price. When the quantity produced is increased, the price might decrease to sell the additional units, resulting in a decrease in MR.

'Acharya Ramchandra Shukla' was born in 1884 in a village named Agona in Basti district, Uttar Pradesh, India. His father Pt. Chandrawali Shukla was a Sarayuparin Brahmin. He was a supervisor Kanungo and biased of Urdu. Shuklji had studied till the Intermediate. After this, he did the job. Then he left the job and became a teacher. He started writing in Hindi from his student life. Impressed by Shuklaji's ability, Nagari Pracharini Sabha, Kashi called him to work in the Hindi literature. Shuklaji was appointed Hindi teacher in Hindu University and later became the Head of Hindi Department. He died in 1941 AD. Following are the major compositions of Acharya Ramchandra Shukla- 'Charan Vinod', 'Radhakrishna Das', 'Chintamani Triveni', 'Surdas', 'Ras Mimamsa', 'History of Hindi literature' etc. He edited 'Bhramar Geetasar', 'Bharatendu Sahitya', 'Tulsi Granthavali' and 'Jayasi Granthavali'. The talent of Acharya Ramchandra Shukla Ji was multi-faceted. He was a great essayist, critic and thinker. He is considered the first basic critic of Hindi. His history of Hindi literature is considered to be superior in history. Acharya Ramchandra Shukla was the pride of Hindi. Full name of 'Dr. A.P.J. Abdul Kalam' was 'Dr. Avul Pakir Jainulabdeen Abdul Kalam'. He was born on October 15, 1931 at Dhanushkothi in the temple town Rameshwaram in Tamil Nadu. He was born in a poor family, but he was an exceptionally brilliant child. Kalam passed the B.Sc. examination from Saint Joseph College, Thiruchirapalli. He joined Madras Institute of Technology (MIT). His further knowledge in the field got upgraded when he joined Defense Research and Development Organization (DRDO) in 1958 and Indian Space Research Organization (ISRO) in 1963. He is known as the Missile Man of India. The various Indian Missiles of world order like Prithvi, Trishul, Akash, Agni, etc. are mainly the result of his efforts and caliber. Dr. A.P.J. Abdul Kalam became the 11th President of India. He served the country from 2002 to 2007. For his excellence and brilliance, he was awarded the prestigious Bharat Ratna in 1998; Padma Vibhushan in 1990; and Padma Bhushan in 1981. Dr Kalam expired on Monday 27 July 2015. He suddenly fell unconscious when he was delivering a lecture at the Indian Institute of Management at Shillong. On 30 July 2015, the former President was laid to rest at Rameswaram's Pei Karumbu Ground with full state honours. Over 350,000 people attended the last rites, including the Prime Minister, the governor of Tamil Nadu and the chief ministers of Karnataka, Kerala and Andhra Pradesh. Dr. A.P.J. Abdul Kalam was mainly interested in work. He was a bachelor. He was not interested in going abroad. He wanted to serve his motherland first. He said that he thinks his first and foremost duty is to serve his motherland. He was fond of music and the Koran and the Gita. Ever since becoming the head of the Indian State, he had been having interaction with children all over the country. He was by no means a miracle man. His advice to the youngster of the nation was to "dream dream and convert these into thoughts and later into actions".
Close Menu