TR (Total Revenue)

Definition

TR refers to the total amount of money a firm receives from selling its goods or services. It is calculated by multiplying the price per unit by the quantity sold.

Analogy

Think of TR as the money a musician earns from selling concert tickets. The more tickets they sell and the higher the price per ticket, the greater their total revenue.

Related terms

Elastic Demand: Elastic demand refers to a situation where a small change in price leads to a relatively larger change in quantity demanded. In other words, consumers are very responsive to changes in price.

Inelastic Demand: Inelastic demand refers to a situation where a change in price has little impact on quantity demanded. Consumers are not very responsive to changes in price.

Marginal Revenue: Marginal revenue is the additional revenue earned from selling one more unit of a good or service. It can be calculated by subtracting the previous total revenue from the new total revenue when one additional unit is sold.