1. Revenue

2. Welcome Back

3. Revenue
Total Revenue: Money received from the sale of goods and Services.

4. Companies with the largest Revenue
1. Walmart -highest annual revenue: $482bn

5. Home of the Free

6. Home of the Freaky

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10. Know this guy?

11. Wal Mart
Would be the 49th largest country if you compared their revenue to the GDP of the Economies of the world.

12. The Next 3 State Grid (China) - $315.1bn (Utilities)
Sinopec (China) - $267.5bn ( Refining)
China Natural Petroleum (China) - $262.6bn (Refining)

13. Fun With Math Total population of U.S.A = 323 million.
Total Population of China= 1.38 billion.

14. Wal Mart: 482,000,000,000/323,000,000=
$1,492 per Man, Woman and Child in U.S.A
State Grid: 315,000,000,000/ 1,380,000,000=
228 per Man, Woman and Child in China

15. Howevers: This is calculated in U.S. Dollars.
Walmart sells in Mexico as well.
State Grid also operates power plants in the Phillipines.

16. Revenue Average Revenue: Total Revenue divided by sales.
I make CHF 1,000,000 selling A* grades to students.
I sell 2 A* grades.
My Average Revenue is CHF 500,000

17. Revenue
Marginal Revenue: The money received from selling one additional unit of output.
Do not forget: Marginal = Additional.

18. Market 1 Price is Constant Market for Gold: 1 Ounce= 1000 CHF
Actually its around 1,200; but it does not matter.
If price is constant, Average Revenue will be the same as Marginal revenue.
There is only one price in the market for Gold.

19. The Market for gold or any major commodity is perfectly competitive.
Many buyers and sellers
Few barriers to entry
Perfect Knowledge
Homogenous Product

20. Market 1
The Seller in this market has no real control over the market price.
If they want to sell their goods/services, they will do it at market price.

21. Market 1 Number of Ounces Average Revenue Marginal Revenue
Total Revenue 1
1,000 2
2,000 3
3,000 4
4,000

23. Please Note In the graphs above:
Total Revenue increases at a constant rate.
Average and marginal revenue stay the same.

24. Market 2 Price is Not Constant
The price “is” determined by the people selling the good or service.
Think: Seats for a concert.

25. This occurs when the elasticity of demand is not perfectly elastic.
Price changes, so does demand.
PRICE DETERMINES DEMAND.
Mr. Gelsie will not pay CHF 1,000 to fly to London tonight. However, someone may.

26. The talented Justin Bieber

27. Justin Bieber
If a rich parent wanted Justin Bieber to sing at his daughters very exclusive 16th birthday party, he may be willing to pay CHF 100,000.
CHF 100,000 / 100 kids = CHF 1,000 per kid.

28. Justin Bieber
Now Justin Bieber is putting on a concert in the New Orleans Superdome.
Seating Capacity: 70,000 people.

29. Some Demographics Average Household Income: $45,000/year.
Per Capita Income: 25,000/Year.

30. Justin Bieber
There is no way He can charge CHF 1000 per ticket and expect to fill that stadium.

31. Justin Bieber
Our man Justin will have to sell at an affordable price to maximise the total revenue he makes.
For Example:
CHF 1000 = 100 tickets sold = CHF 100,000
CHF 25= 50,000 tickets sold = 1,250,000

32. Justin Bieber
Remember the name of the game is to maximise total revenue.
Reducing you price may increase total revenue if demand is elastic.
This will be true until your price becomes too low.

33. Justin Bieber 1 ticket to the superdome costs CHF 5.
Max seating capacity 70,000.
TR = CHF 5 x 70,000 = CHF 350,000.

34. Assumption We assume the normal rules of demand.
Price goes up, demand goes down.
Price goes down, Demand goes up.

35. Price
Demand
Total revenue
Marginal Revenue 9 1 8 2 16 7 3 21 5 6 4 24 25 -1 -3 -5

36. Here is Your Graph