Total Revenue Formula In Economics

Total revenue price x quantity.

Total revenue formula in economics. Formula how to calculate total revenue. Profit total revenue total cost. Total revenue tr equals quantity of output multiplied by price per unit. Total revenue is the easy part.

5 000 total revenue x. Total revenue is a function of output which is mathematically expressed as. Total revenue tr price p x quantity q or. Total revenue can be calculated as the selling price of the firm s product multiplied by the quantity sold.

It equals the quantity of output the firm produces times the price at which it sells its output. When demand is elastic a fall in price leads to a rise in total revenue for example a 10 fall in price might cause demand to expand by only 25 ped 2 5. Tr p x q tr q. Total gross revenue does not include any taxes paid for an item.

Total revenue is 8 000. Tr price p total output q for instance if an organization sells 1000 units of a product at price of rs. The formula for calculating total revenue can be written as. Put simply calculating revenue means multiplying the price of each product by the total number of units sold.

This is calculated before any discounts are applied. When demand is perfectly inelastic i e. Revenue should be reported to the government periodically so that the government could know the total income of the country and collect the taxes. 10 per unit the total revenue of the organization would be rs.

Ped zero a given price. Total revenue 20 x 400 8 000. If helen produces 10 000 cookies and sells them at 2. In economics revenue will help know the sales of given quantity of goods and services.

Total revenue in economics refers to the total sales of a firm based on a given quantity of. Where p price of the product and q quantity. To see how a firm goes about maximizing profit we must consider fully how to measure its total revenue and its total cost. Tr p q.

It looks like this. If a boutique priced a blouse at 50 and it sold seven that puts total gross revenue for that product at 350. The total price gained by a given source is revenue. When demand is inelastic a rise in price leads to a rise in total revenue a 20 rise in price might cause demand to contract by only 5 ped 0 25.

The money that a firm earns per period per day say from selling its product is called his total revenue tr per day. Price is the price each unit sells for. Units are selling at 20 per unit and 400 sell. Formula for total revenue.

If he sells the same amount each month his total revenue would drop to 4 000 80 x 50 4 000. Using this same formula the craftsman can also determine how many more boots he would need to sell to make the total revenue amount before the discount by dividing his previous total revenue by his discounted price.