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;
|10 ||14 ||140 |
|12 ||13 ||156 |
The total revenue can be visualised using the supply and demand diagram.