Multiple Choice
Which of the following best describes how total cost is calculated in microeconomics?
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10. The Costs of Production
Revenue, Cost, and Profit
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Assume the quantity produced and sold (q_{pm}) is 100 units, and the price per unit is \$5. What is your total revenue?
A
Total revenue is 5
B
Total revenue is 105
C
Total revenue is 500
D
Total revenue is 100
Verified step by step guidance1
Identify the formula for total revenue, which is given by: \(\text{Total Revenue} = \text{Price per unit} \times \text{Quantity sold}\).
Note the given values: the quantity produced and sold \(q_{pm} = 100\) units, and the price per unit is \$5$ dollars.
Substitute the given values into the total revenue formula: \(\text{Total Revenue} = 5 \times 100\).
Multiply the price per unit by the quantity sold to find the total revenue.
Interpret the result as the total amount of money earned from selling 100 units at \$5 each.
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