Sales, revenue and costs

Question 1

How do you calculate total revenue ?

Answer 1

quantitiy sold x price

Question 2

What could a business do to increase sales revenue?

Answer 2

• increase quantity sold ( advertising/ promotion)
• reduce price to increase demand
• increase price (dependent on elasticity)
• increase output

Question 3

If the item is elastic and the price increase what happens to the revenue ?

Answer 3

• decrease

Question 4

If the item is elastic and the price decreases what happens to the revenue ?

Answer 4

increase

Question 5

If the item is inelastic and the price increase what happens to the revenue ?

Answer 5

increase

Question 6

If the item is inelastic and the price decreases what happens to the revenue ?

Answer 6

decrease

Question 7

What is a cost?

Answer 7

expenditure a firm makes as part of its trading

Question 8

How do you work out total costs?

Answer 8

variable costs + fixed costs

Question 9

How do you work out total variable costs?

Answer 9

variable cost per unit x quantity

Question 10

What are fixed costs?

Answer 10

do not change when a business alters output

Question 11

What are variable costs?

Answer 11

alter directly with the businesses level of output

Question 12

Examples of fixed costs?

Answer 12

• rent
• salaries
• insurance

Question 13

Examples of variable costs?

Answer 13

• supply of materials

- utilities

Question 14

businesses with high fixed costs?

Answer 14

• manufacturing
• schools
• services

Question 15

How to cut fixed costs?

Answer 15

change location

Question 16

How to cut variable costs?

Answer 16

• cheaper supplier
• change utilities
• faster employees

Question 17

What are semi variable costs?

Answer 17

costs that have both fixed and variable elements

Question 18

give an example of semi variable costs?

Answer 18

electricity