Meaning Of Revenue Concept
Revenue means the income earned by a company from the sale of it commodities/goods. While in the government cases, it is taxes of and incomes from other sources.
The concept used under revenue are as follows:
1. Marginal Revenue (MR): This refers to increase in total revenue as a result of selling one more unit of a product.
2. Total Revenue (TR): This is the total amount of income earned from the sale of a specified unit of product. It is calculated as: TR = AR x Q.sold.
3. Average Revenue (AR): This is equilvalent to the unit of price of a product. It is calculated as: AR = TR.
Profit is the excess of revenue over cost of profit. I.e loss. Profit is usually calculated as profit = TR – TC
(AR x Q) – (TFC + TVC)
= Price x Q – (ATC x Q).