Search results
Results from the WOW.Com Content Network
Profit maximization using the total revenue and total cost curves of a perfect competitor. To obtain the profit maximizing output quantity, we start by recognizing that profit is equal to total revenue minus total cost (). Given a table of costs and revenues at each quantity, we can either compute equations or plot the data directly on a graph.
If your total product revenue is $50 and the total production costs are $35, your gross profit would be $15. To find the gross profit margin, you’d do the following calculation: ($50-$35) / $50 ...
Price and total revenue have a negative relationship when demand is elastic (price elasticity > 1), which means that increases in price will lead to decreases in total revenue. Price changes will not affect total revenue when the demand is unit elastic (price elasticity = 1). Maximum total revenue is achieved where the elasticity of demand is 1.
If an investor makes $10 revenue and it cost them $1 to earn it, when they take their cost away they are left with 90% margin. They made 900% profit on their $1 investment. If an investor makes $10 revenue and it cost them $5 to earn it, when they take their cost away they are left with 50% margin. They made 100% profit on their $5 investment.
5. Impractical to assume sales mix remain constant since this depends on the changing demand levels. 6. The assumption of linear property of total cost and total revenue relies on the assumption that unit variable cost and selling price are always constant. In real life it is valid within relevant range or period and likely to change. [2]
The total cost, total revenue, and fixed cost curves can each be constructed with simple formula. For example, the total revenue curve is simply the product of selling price times quantity for each output quantity. The data used in these formula come either from accounting records or from various estimation techniques such as regression analysis.
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]
Reuben Gregg Brewer (TotalEnergies): If you want exposure to oil but also want to hedge your bets, given the ongoing clean energy shift, examine TotalEnergies. 3 Top Oil Stocks to Buy Before 2024 ...