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Maximising sales revenue is an alternative to profit maximisation Maximising sales revenue is an alternative to profit maximisation, and occurs when the marginal revenue, MR, from selling an extra unit is equal to zero. Sales maximisation is another possible goal and occurs when the firm sells as much as possible without making a loss. Not-for-profit organisations may choose ... Sales maximization and profit maximization are distinct business objectives. Sales maximization is an approach to business where the company’s primary ... Sales are the first step toward profits. Without sales, there are no profits. Profit is also called income, net profits and net income. Sales are also called revenues ...
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Sales maximisation is another possible goal and occurs when the firm sells as much as possible without making a loss.
In the example of the tennis racket manufacturer, the price necessary to maximise sales volume, without making a loss is a price of £30 per racket, where it sells 80 rackets. Although sales would increase (to 90 rackets) if the firm reduced the price to £20, it would make a loss of £700 - hence selling 80 rackets at £30 is sales maximisation point. Of course, in this example, profits are maximised at a much lower output and higher price - namely selling 50 rackets at £60 each (where profits are £900.
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