Revenue
Topic: Production Function, Returns and Costs · NCERT: Class 9, Ch 9 "The Price Puzzle: What Drives the Market"
Meaning
Revenue is the total money a business earns from selling its goods or services, before any expenses are taken out. It is the "money in" side of a firm's accounts. It matters because Profit = Revenue − Cost. A firm's revenue can be high while it still makes a loss if its costs are higher.
Example
A tea stall sells 300 cups a day at ₹10 each. Its revenue is ₹3,000 a day. If milk, tea leaves, gas and rent cost ₹2,200, its profit is ₹800.
Don't confuse with
- Profit: revenue is the full amount earned from sales. Profit is what remains after the cost of production is subtracted.
Related concepts
- Production
- Producer
- Seller
- Cost of production
- Production function
- Efficiency in production
- Technology