Question

Total revenue is: a. the price effect times the quantity effect. b. the price of a good times the quantity of the good that is sold. c. the price of a good divided by the amount of the good sold. d. total sales less total cost.

Answer 1

Answer: b. the price of a good times the quantity of the good that is sold.

Explanation: Revenue is defined as the amount of money taken as sales transacted in a given period. Total revenue is given by multiplying the price of a good by the amount of the good that is sold. In simpler terms, the total revenue is price multiplied by quantity.

When the price of a good is high, the quantity of that good sold would be less, this is because consumers of the good would be less than willing to buy at that price and therefore, total revenue reduces. When the price of the good is low, demand increases and total revenue also rises.

Answer 2

Answer:

The correct answer is b. the price of a good times the quantity of the good that is sold.

Explanation:

Total income (IT): is simply the price of a good multiplied by the quantity of that good sold. The sum of the income obtained from the sale of all the units produced or the total amount that a company receives for the sale of its product: the unit price for the quantity of product that the company decides to produce.

It is calculated as the price of the good multiplied by the quantity sold.

When the price is reduced, what happens to income, that is, whether it increases or decreases, will depend on the quantity demanded increasing enough to counteract the effect of the price reduction. For a competitive (price-taking) company in the product market, Total Revenue is simply proportional to production.