Sales revenue. Flashcards
What is sales revenue?
It is the money a business receives for selling the goods and services it produces.
What is the equation for sales revenue?
sales revenue= quantity sold x selling price.
Give three main methods of increasing sales revenue.
- Increasing the selling price.
- Decrease the selling price to increase quantity sold.
- Increase the quantity sold without changing the price.
What’s the effect of price change?
The effect of a price change (increase or decrease) on sales revenue depends on what happens to the amount sold, the demand. This is known as price elasticity of demand of the product. Some products are said to be ‘price elastic’ and some are ‘price inelastic’
What is price elastic?
A change in price will result in a greater proportional change in demand.
What is price inelastic?
A change in price will result in a smaller proportional change in demand.
What is the formula for average costs?
Average costs = total costs/ number produced.
