Unit 3.3 Flashcards
Total revenue (TR)
the sum of income received by a business from its trading activities. It is calculated by multiplying the unit price (P) of a good or service by the quantity sold (Q)
TR = P × Q
Average revenue (AR)
The amount a business receives from its customers per unit of a good or service sold. Average revenue is mathematically the same value as the price per unit.
AR = TR ÷ Q
Examples of revenue streams
The term revenue streams refers to the various sources of revenue for a business.
Sales revenue is the most common form of revenue stream for businesses. However, most businesses will have more than one revenue stream (sources of revenue)
Examples of various revenue streams include:
-transactions fees charged to customers
-membership fees
-royalties
-merchandise sales
-sponsorship revenues
-subscription charges imposed on customers
-dividends from shareholdings in other companies
-donations/gifts
-interest earnings from cash savings in a bank account
-grants and subsidies from the government
