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BUSS1 - Market Size, Share and Growth Calculations
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% |
Jim Riley
Jim co-founded tutor2u alongside his twin brother Geoff! Jim is a well-known Business writer and presenter as well as being one of the UK's leading educational technology entrepreneurs.
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