Calculating Total Revenue [Virtual Learning Arcade]

An explanation of how total revenue is calculated and graphed from price and quantity information as part of the break-even analysis simulation in the Virtual Learning Arcade.

Spotlight on the theory

Calculating Total Revenue

Total revenue is the total money received from the sale of any given quantity of output.

The total revenue is calculated by taking the price of the sale times the quantity sold, i.e.

total revenue = price X quantity.

The technique is illustrated below;

Price Quantity Total Revenue
10 14 140
12 13 156

The total revenue can be visualised using the supply and demand diagram.

Supply and demand diagram

If there was an increase in price, total revenue would... (assuming no change in quantity sold)(select one answer)
(a) * increase
(b) * decrease
(c) * stay the same