Total Revenue (TR)
Definition
Total revenue refers to the overall income generated from selling a certain quantity of goods or services. It is calculated by multiplying price per unit by the quantity sold.
Analogy
Imagine you have a lemonade stand and sell cups for $1 each. If you sell 50 cups, your total revenue would be $50 ($1 x 50).
Related terms
Average Revenue (AR): Average revenue is obtained by dividing total revenue by the quantity sold.
Price Elasticity of Demand (PED): Price elasticity of demand measures how responsive demand is to changes in price.
Marginal Revenue (MR): Marginal revenue represents the change in total revenue resulting from producing and selling one more unit.
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