Revenue and Demand

• What is revenue calculated as?

  Volume sold × selling price
• In the example of selling popcorn, if 1,000 boxes are sold at £5 each, the revenue is £5,000
• Revenue represents the total sales value of what a business sells.
• What does demand measure?

  Customer willingness to buy
• Demand is the quantity customers are willing and able to purchase at different prices
• Steps in determining the demand curve

  1️⃣ Discover quantity demanded at a specific price

  2️⃣ Vary the price

  3️⃣ Observe changes in quantity demanded

  4️⃣ Plot the demand curve
• What does a demand curve illustrate?

  Quantity demanded at prices
• If the price of popcorn is halved from £5 to £2.50, the quantity demanded might increase
• Demand is influenced by the price of a product.
• What is price elasticity of demand related to?

  Sensitivity of demand to price
• Revenue is the sales value of what a business actually sells
• Demand reflects how much customers are willing and able to buy at different prices.
• What is the key difference between revenue and demand?

  Revenue is sales value, demand is willingness to buy