Simple definitions

1. Revenue and Profit

2. Revenue
The amount of money that a company actually
receives during a specific period, including
discounts and deductions for returned
merchandise.

3. Total Revenue
This is the total income a firm receives.
Total Revenue = price × quantity

5. Marginal Revenue
Marginal revenue (MR) is the revenue generated
from selling one extra unit of a good or
service.
MR= change in TR/ change in quantity
demanded

7. Average Revenue
Average revenue (AR), is revenue per unit, and is
found by dividing TR by the quantity sold, Q.
AR= TR/Q

9. Profit
The difference between the revenue received
from the sale of an output and the
opportunity cost of the inputs used.
Profit = Total revenue (TR) – Total Costs (TC)

10. • http://www.investopedia.com/
• http://www.economicsonline.co.uk/Business_
economics/Revenue_theory.html