How Do You Change Total Revenue Economics?
There are some distinct tasks a company can carry out that can have a profound impact on revenue economics. First, a definition is in order. In economic terms, a company’s revenue is determined by multiplying the price of its product or service, referred to as a unit, by the number actually sold. To be able to dissect and change economic revenue, it is important to understand the economic concepts of total costs, marginal revenue and marginal costs. Clearly understand the individual components that go into revenue economics, which are total costs, marginal costs and marginal revenue. In economic terms, marginal revenue represents the revenue a business generates when producing one additional unit of good or service. Marginal costs is the cost a business incurs for producing one additional unit of good or service. Total costs are calculated by multiplying the cost times all the units actually produced. The company’s total economic profit is figured by subtracting total costs from total
