Scelta multipla
Refer to Figure 5-1. With reference to Graph A, at a price of \$10, total revenue equals:
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4. Elasticity
Total Revenue Test
Scelta multipla
The total revenue received by sellers of a good is computed by:
A
adding the fixed costs to the variable costs
B
dividing the price of the good by the quantity sold
C
subtracting total cost from total profit
D
multiplying the price of the good by the quantity sold (TR = P \(\times\) Q)
Guida verificata passo dopo passo1
Understand the definition of total revenue (TR) in microeconomics: it represents the total amount of money received by sellers from selling a certain quantity of a good.
Recall that total revenue is calculated by multiplying the price per unit (P) of the good by the quantity sold (Q). This is expressed as \(TR = P \times Q\).
Recognize that fixed costs and variable costs relate to total cost, not total revenue, so adding them does not give total revenue.
Note that dividing price by quantity or subtracting total cost from total profit are not correct methods to find total revenue.
Conclude that the correct formula for total revenue is multiplying the price of the good by the quantity sold, i.e., \(TR = P \times Q\).
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