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Total revenue can help with a firm's operational decision: whether the firm should be shut down or kept open. In the short run , if the total revenue (TR) that a firm can earn from operating will not exceed the variable costs (VC) of operation, the firm should be shut down.
Revenue" may refer to income in general, or it may refer to the amount, in a monetary unit, earned during a period of time, as in "Last year, company X had revenue of $42 million". Profits or net income generally imply total revenue minus total expenses in a given period. In accounting, revenue is a subsection of the equity section of the ...
This is a list of abbreviations used in a business or financial context. ... ARPU – Average revenue per user; ... $225K would be understood to mean $225,000, and $3 ...
This can be confirmed graphically. Using the diagram illustrating the total cost–total revenue perspective, the firm maximizes profit at the point where the slopes of the total cost line and total revenue line are equal. [4] An increase in fixed cost would cause the total cost curve to shift up rigidly by the amount of the change. [4]
Difference between how accountants and economists view a firm. In economics, profit is the difference between revenue that an economic entity has received from its outputs and total costs of its inputs, also known as surplus value. [1] It is equal to total revenue minus total cost, including both explicit and implicit costs. [2]
It also is a rough indicator of the earnings impact of a marketing activity. A firm can analyze ideal output levels to be knowledgeable on the amount of sales and revenue that would meet and surpass the break-even point. If a business doesn't meet this level, it often becomes difficult to continue operation.
Market share is the percentage of the total revenue or sales in a market that a company's business makes up. For example, if there are 50,000 units sold per year in a given industry, a company whose sales were 5,000 of those units would have a 10 percent share in that market.
Revenue management requires that a firm must continually re-evaluate their prices, products, and processes in order to maximize revenue. In a dynamic market, an effective revenue management system constantly re-evaluates the variables involved in order to move dynamically with the market.