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The sales revenue line demonstrates the amount of sales earned throughout the different level of activities. It can be observed that between zero and somewhere between activity B and C there is a straight line increase or constant rise in sales revenue. This means that unit price charged is the same and volume sold has been increasing at a constant rate.
Beyond the point between C and B sales revenue increases at much slower rate, this represents that selling price per unit is too high and in order to achieve previous rates of growth there has to be a reduction in unit price.
1. The table below gives data for Southland where there are three consumption goods: bananas, coconuts and grapes. Goods Quantity in base period basket
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