Total revenue
Definition. Total revenue is the total amount of money a firm receives from selling its output over a period, calculated as the price per unit multiplied by the quantity sold. It is a key measure of a firm sales earnings before any costs are deducted.
How total revenue responds to a price change depends on price elasticity of demand. When demand is price inelastic, a price rise increases total revenue, whereas when demand is price elastic a price rise reduces it.
This term belongs to Price Elasticity of Demand and Supply in A Level Economics. Read the full chapter for the diagrams, worked examples and exam technique.
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