00:13 Good students, I am Mr. Kenny and I'll be taking you economics.

00:19 We shall be looking at a very interesting topic called revenue concepts, revenue concepts.

00:27 What exactly do we mean by the word revenue, what is revenue?

00:34 Revenue, as the name implies refers to as what, as the total amount realized from the sales of a particular product or service.

00:44 The amount realized from a particular product or what or service, what exactly are we talking about?

00:51 When we say revenue, the costs of producing an item must be considered.

01:01 However, when you produce an item and then you sell that item, you will realize money.

01:09 Is that so?

01:10 Now, the total amount you have realized when you sell a commodity you have produced,

01:16 that total amount realized is what we call revenue and we together cost is the amount you have spent to produce that commodity.

01:26 Is that so?

01:27 Then, when you sell the commodity, money comes in.

01:30 That total amount that does actually come in in respect of the sales of that commodity, that's what we call revenue.

01:39 Are we together?

01:40 Now, I wanted to note that your revenue here can be classified into three types.

01:50 That is, we have what we call the total revenue, which is attributed as CR, total revenue, okay?

01:58 Total revenue, then of course, we have what we call average revenue, which is average as well as AR, average revenue.

02:08 Then, finally, we have what we call the world, the marginal revenue, which is worth AR.

02:15 And how do you calculate each of these concepts, as it is worth the split on your screen?

02:21 The very first one we have, here is the total worth revenue.

02:25 And to get your total revenue, it is always equals to worth, average revenue, multiply that worth quantity.

02:33 The quantity is the worth is the unit that has been sold, multiply that worth the average revenue.

02:40 The average revenue will be given to you in the world and the question, are we together?

02:44 Then, to get your average revenue, your average revenue is worth is your total revenue, okay?

02:51 Divide that worth the quantity that has been sold, okay?

02:55 Don't forget, average revenue is worth total revenue divided by quantity.

03:01 Then, finally, your marginal revenue is changed in total revenue over change involved in quantity, okay?

03:10 That is change in CR over change in Q.

03:18 Whenever you see something of this nature in economics, that looks like a small triangle, it is what we call change.

03:24 So, that is how you pronounce it, change in total revenue over change in worth quantity, are we together?

03:31 So, without wasting time, let's look at worth, illustration, and respect of worth of these beautiful topics.

03:40 This question is taken from 1988 of your SSC past questions.

03:47 And whether I like it or not, the question will always be said when it comes to worth, when it comes to these topics.

03:54 Here, I have my CR, CR represents worth total revenue, is that so?

03:59 Here, I have MR marginal revenue, CC, total cost, MC marginal cost, are we there?

04:08 Then, look at it, look here, there is something I'm missing here, F is missing, then you have M is also missing, X is also worth missing.

04:22 So, how do you calculate all this missing figure?

04:26 Look at the question, look at the question, what does the question ask us?

04:31 The question says, completed table, okay, by calculating the missing figures, completed table, by calculated words, the missing figures, okay?

04:42 Now, look at this, look at this, we have CR, quantity, MR, CC, and what, MC.

04:51 Actually, there are two questions here, I will be solving that of 1997 and because it has the same approach as that of 1998, you are going to go home and lay your hands on that of worth 1998, why I solved that of 1997.

05:07 So, you use the same approach to solve the question, okay?

05:10 So, let's get the words, the solution to these words, so this interesting question won't have to the other.

05:19 Look at the board, here you have what, P is on the wall, it's first on the CR, remember the formula I give to us initially, I say your CR equals to wall, change in wall, sorry?

05:36 Because your AR times what, times quantity, CR is what, AR, AR, what's that I want, quantity, okay?

05:51 Then, your words, your AR will be equals to what, CR, over what, quantity, then finally your MR will be equals to what, change in CR, over, change in quantity.

06:10 Now, look at it, CR, whether it's false, it's false on the wall, on the P, so you will say P, it implies words, P implies words, CR, so how do you get your CR, the formula is what, AR, not one check, are we giving AR the question?

06:30 No, AR is not giving, so as an intelligence student, you need to device another means of getting your CR, if you remember vividly what I was taking your course concept, I said to get your words, your total cost, it's going to be worth, fixed cost plus words, very because, but at times, exactly like I'm very funny, they will not give you fixed costs, they will not give you very because, and they will be expecting you to calculate total cost.

07:00 So what do you do, use the under formula, which is all, which is, you say all, your CC, constable equals to all, average cost times quantity, so you can say, you can use the same idea here, okay, average cost times quantity, also get your CR, you say, average revenue, times quantity, but look at this question, there is no words, average revenue.

07:27 I hit a surprise, there is no average revenue, so this is the secret I do give to my world, to my students, anytime, any day, okay, you can always use the word, the formula, for words, for, MR, to get your world, your CR, what exactly are we looking for, we are looking for CR, Zanke, so what do you do, you can say, use words, use MR.

07:57 Use words, MR, do you have MR there, yes, so what's formula for MR, so your MR equals the word, change in CR, over words, change in words, quantity, Zanke, so, so briefly, what do we do from here, what's our MR, since you're looking for P, what's your MR, trace it, MR is 1, MR is 1, so you say,

08:25 1 equals, change in CR, this is your CR, you know what it is, so you say, whatever is here, which is, let's assume it's P, unknown, P minus, whatever you have before it, which is 30, P, minus, what you have before 30, before 31 is what, is 30, okay, you're looking for words, for CR, so change in CR means, that chain means, whatever you have here, minus, whatever you have before it, okay.

08:55 so it's going to be P minus 30, over changing quantity, under that same P, what is it going to see, 6, okay, so you say, 6, minus 5, 6, minus 5, so your 1 equals to words, equals to P minus 30, over 6 minus 5 equals words, 1, so what are you looking for, P, so this is the 1,

09:19 you have a word, cross multiply, and when you cross multiply, what do you have, P minus 30 times, when you have words, P minus 30 equals to 1, equals to 1, times 1, 1, is that so, so what are you looking for, P, you make P the subject of the word formula, and then you say, P equals to words, 1, when this minus goes to the other side, it becomes word, plus 30, okay.

09:47 let me do it well for you, so you see clearly, take a look again, take a look, P minus 30 times 1, now give us words, now give us P minus 30, okay, let's give us P minus 30, P minus 30, okay, then this times this, we give us words, we give us 1, okay.

10:10 so you cross multiply from here, so what do you have, P minus 30 times 1, you see here, P minus 30 equals to 1, times 1, is words, 1.

10:21 so what are you looking for, P, P equals to 1, this minus goes to the other side, because plus 30, so your P equals to 1 plus 30, is words, 31.

10:35 so that is how you guess your words, the value of P, is not more than that, okay, so that's this for your P, and if you look at words, the illustration, you will see that's exactly what we are doing.

10:45 so the next one is words, is your R, look at this, how is the R, our first one was, Magina Revenue, very easy, how do you get Magina Revenue, the formula is the R, change in CR over changing quantity, change in CR over change in quantity.

11:04 so look at this, come here, what do you have here, 24, right, 24, minus 28, can you see, 24, minus 28, what would that give us, that would give us minus 4, so to get my words, my R, R for the other words, on the MR,

11:28 which is what, change in CR over change in quantity, so what do I do, I would say, this minus this, that's 24, minus 28, it's over, what's the quantity, it's minus 7, it's minus 7, okay, so what do I do, transform minus 28, we give us what, minus 4, please don't ignore that negative, it's very important, then divide my words, this.

11:57 so this equals to us, minus 4, and that's exactly what we are looking for, so we've got some valuable words of p to be 31, what's the value of R to be words, minus 4, okay, then the next thing we need to get is what, is the value of our words of our q, okay, can you see, q is there, q is there, q for the other words,

12:23 imagine our revenue as well, the same approach, just say to get your q, it's going to be 28, minus words, 28, that's changing CR over changing quantity, okay, and that would give us what, 0, 20 is minus 28, we give us what, 0, so it's not more than that, then of course,

12:43 look out here, look out here, why is it need to calculate, look at the question, the question is, complete the missing thing by calculating the missing figure, p, q, R, h, c, and what, you, so, after computing this using the above formulas,

13:02 go to the next requirements, just follow out the formulas, you will see to complete all the ones that is worth missing, okay, so all these things you are seeing equals to, equals to, equal, equality value, but for them, it shows that we are not giving those values, those are the words, those are the missing figures, okay, those are the missing figures,

13:22 so you get this rubbish, and you get this mc, mc is what, change in c, that's 25, 25, and you get what, the next one, just use the formula, and you are able to add your answer, so the next question says,

13:37 at what output, at what output is profit maximized, ladies and gentlemen, at what output is profit maximized, profit is said to be worth maximized, at the point we are worth, we are, mc equals to, equals to, m, R,

14:04 okay, that is the point where if m is said to have maximized profit, okay, now, if you go back and look at words, at that table, where do we have the maximum profit, generally, to get your profit in economics, profit is said to be worth, c, R, when it is worth, greater than, c, c,

14:29 that is, profit is total revenue minus worth, total cost, I will together, total revenue minus total cost, all, you see, profit is, when, c, R, is greater than, c, c, okay, now look at the table, look at the table, we are comparing, c, R, and c, c, is that not so, look at the table, okay, you have, c, R, to be zero,

14:57 here you have, c, c, to be five, is that profit or loss, c, R is zero, c, c, is five, that is worth, a loss, why, because c, c is higher than, c, R, for you to have profit, your, c, R, must be greater than, c, c, are we together, so there is a loss there, we don't need it, with the question is 10 years to calculate, where you have the maximum profit,

15:24 where do you have maximum profit, maximum profit, okay, so, let's go to the next one, 9, and 8, is that profit, yes, how much profit, profit of 1, R, I know, you see, 9 minus worth, 8, the difference between your, c, R, and your, c, c, so that is worth, 1, take a look at the next one,

15:49 TR is 18. Here is what 16. Is that profit? Yes, I don't know because TR is higher than

15:57 TC. So what's the profit? 18 minus world 16. That's what 2. There's a profit of 2 there are there. Look at the next one

16:06 2421. Of course, there's profit 28, 21. There's profit 28, 25. There is profit 30, 25. There's profit. Here is 31, here is 5. There's a profit.

16:19 Here is 24, here is 24. What do we call that? Whenever your TR is equals to your TC, what do you call that? In economics, whenever TR is equal to TC, that is all called brick-even points.

16:41 What happens at brick-even points? What happens at brick-even? At brick-even, total revenue equals to total cost. That's the situation whereby there is no profit, there is no loss.

16:58 Yes, it's possible in businesses, whenever your business does not make profit, does not make loss, just in betany. That shows you have been able to brick-even, are we together? So that is it.

17:11 So if you look at this table now, what output is the profit maximized? So as what output is profit maximized, profit is maximized as what? This output is from here.

17:26 Here, the difference between this and this is what is the loss. Take a look. Here, is there profit here? No. Is there profit here? Yes. There's one error here.

17:38 Two error profits. Three error profit. 20 is minus 21, that's what? That's seven. Seven error here. And if you look here, this is 30. This is what? 25.

17:52 This is 31. This is what? 25. So what do you have? The maximum profit. Where do you have the maximum profit? Of course, this is from here. As output for 20 and 21. The difference is what? Seven.

18:06 So that's where you have the maximum profit. Okay? So profit is maximized as output for. That's how you tell them. Profit is maximized as what? As output for. Then let's go to some things.

18:20 Calculate the profit when quantity sold is five. What are the quantities we have? We have about what? Eight quantity. That's what sold. Then how will you calculate the profit?

18:34 How will you calculate the profit? To calculate the profit, I told you your profit is said to be total revenue minus total cost. So you're not going to where there is five.

18:47 They say calculate the worth. The profit when the quantity sold is five. So what is your quantity? Can you see? This is your quantity five. So what is the total revenue?

19:02 Total revenue is what? 30. Minus total cost is what? 25. Can you see? 25. So the difference between this and this is what? Five.

19:15 So ladies and gentlemen, this is our profit. Can you see? Very easy. See R minus CC. That is total revenue minus total cost. Give us profit. What if it is a loss? What will happen? Reverse will be the case. That is loss. We will not be worth CC minus CR.

19:39 As you get to this profit is when total revenue is greater than total cost. Loss is when total cost is greater than total revenue.

19:50 Then finally, the question next question says if you want you should determine the output where MC begins to rise.

20:01 As what output does MC begins to rise? So you go back to the words to the table. MC. This is your MC. Yeah, it's assuming it's zero.

20:13 Here you have three. From three, it's increased to 8. Can you see? So at this point, MC has started increasing from 3 to 8, 8 to 26. Can you see?

20:26 So this is where MC has begun to rise. As what's asked? Tracey, Tracey, Tracey. What do you have? One. So you tell them MC begins to rise as well as output one. MC begins to rise as output one.

20:42 So this is what you need to know in the rest of the world. This is where I'm going to stop my class. But before then, I need to give you an assignment in the rest of the world of that.

21:03 So you go to the 1998 question in my tutorial. From the beginning of the class, I will stop 1997, which I've done. So you have to solve 1998. Are we together?

21:14 Thank you for watching. Till the next class, I am Mr. Kenny. Bye.