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BUSS1 - Market Size, Share and Growth Calculations
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10th April 2015
Students preparing for AQA BUSS1 need to be ready to calculate and interpret data that relates to the size and growth of a market and to the market shares achieved by competitors in the market.The BUSS1 exam may include information which enables these calculations to be performed - indeed the questions may require students to undertake such calculations. Students might also be required to use market-related data to calculate a firm's revenues as part of a profit or breakeven calculation.I have summarised below the formulae that you need to know and provided some examples of how to use them.
Calculating Market Size (per period) | ||
Example: Method 1 |
| |
Number of units sold in market (per period) | Units | 100,000 |
Average selling price (£) in market | SP | £15.00 |
Market size = (Unit x SP) | MSize | £1,500,000 |
Example: Method 2 | ||
Firm's revenues (per period) | Revs | £250,000 |
Market Share (%) | MShare | 5.0% |
Market size = (Revs / Market Share) | MSize | £5,000,000 |
Calculating a Firm's Revenues |
| |
Example: Method 1 | ||
Number of units sold (qty) in period | Units | 5,000 |
Average selling price (£) | SP | £20 |
Firm's Sales Revenue = | Revs | £100,000 |
Example: Method 2 | ||
Market size (£) | MSize | £2,000,000 |
Firm's Market share (%) | MShare | 5.0% |
Firm's Sales Revenue = MSize x MShare | Revs | £100,000 |
Calculating the Market Growth Rate (%) | ||
| ||
Example: | ||
Market Size (£) This Year (Y1) | Y1 | £4,600,000 |
Market Size (£) Last Year (Y0) | Y0 | £4,200,000 |
Change in Market Size (£) (Y1 - Y0) |
| £400,000 |
Percentage Change (%) = (Y1 - Y0)/Y0 |
| 9.5% |
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