Final answer:
Revenue assessment involves considering price elasticity of demand and the quantity sold, as revenue equals price times quantity. The elasticity of demand dictates whether raising or lowering prices will increase revenue.
Step-by-step explanation:
When assessing revenue, two key considerations are: price elasticity of demand and quantity of the product sold. Revenue is calculated by multiplying the product's price by the quantity sold (Total Revenue = Price x Quantity). If the demand for a product is elastic, meaning consumers are sensitive to changes in price, reducing the price can lead to a greater increase in quantity sold, ultimately increasing total revenue. Conversely, if the demand is inelastic, consumers are less sensitive to price changes, and raising prices may lead to higher revenue since the decrease in quantity sold will be proportionally smaller. Assessing this elasticity is crucial for a business to determine the optimal pricing strategy for maximizing revenue.