3.3 Revenue and Profit

• Total revenue: The money a business receives from all of its sales
• Average Revenue : The average of the revenue gained from selling products and services.

  Calculated as: total revenue/output
• Marginal Revenue: The extra revenue gained from selling one more unit. This is the price of the last unit sold
• Profit: Amount of money a business gains from its sales after it has accounted for all of its costs.
• Loss: If a business has higher costs than revenue, it will make a loss.
• Accounting Profit: Level of profit that is reported in business accounts. It does not take into account the opportunity cost of investment.
• Normal Profit: Minimum amount of profit required to convince an owner to stay in the market. The profit required to cover both total costs and opportunity costs.
• Supernormal profit: Profit made above normal profit