1. What Is Total Revenue?

Total Revenue (TR) is the total amount of money a company receives from selling goods or services. It is calculated by multiplying the price per unit by the quantity of units sold.

2. How Does The Calculator Work?

The calculator uses the total revenue formula:

Where:

• \( P \) — Price per unit ($)
• \( Q \) — Quantity sold (count)
• \( TR \) — Total Revenue ($)

Explanation: This formula represents the fundamental relationship between price, quantity sold, and total revenue in business economics.

3. Importance Of Revenue Calculation

Details: Calculating total revenue is essential for businesses to understand their sales performance, set pricing strategies, forecast future earnings, and make informed business decisions.

4. Using The Calculator

Tips: Enter the price per unit in dollars and the quantity sold. Both values must be non-negative numbers.

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between revenue and profit?
A: Revenue is the total income from sales, while profit is revenue minus all expenses and costs associated with running the business.

Q2: Can total revenue be negative?
A: No, total revenue cannot be negative as both price and quantity are non-negative values in standard business contexts.

Q3: How does price elasticity affect total revenue?
A: When demand is elastic, lowering prices can increase total revenue. When demand is inelastic, raising prices can increase total revenue.

Q4: Is this formula applicable to service businesses?
A: Yes, the formula works for both product-based and service-based businesses. For services, "quantity" represents the number of service units provided.

Q5: How frequently should businesses calculate total revenue?
A: Businesses typically calculate revenue daily, weekly, monthly, and annually to track performance and make timely decisions.