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Total Revenue Formula:
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Total Revenue (TR) is the total amount of money generated from the sale of goods or services. It is calculated by multiplying the price per unit by the quantity of units sold.
The calculator uses the total revenue formula:
Where:
Explanation: This formula provides the total income generated from sales before deducting any costs or expenses.
Details: Total revenue is a fundamental metric in business and economics that helps assess sales performance, set pricing strategies, and evaluate business growth. It serves as the starting point for calculating profit and other financial ratios.
Tips: Enter the price per unit in dollars and the quantity of units sold. Both values must be non-negative numbers. The calculator will compute the total revenue automatically.
Q1: What's the difference between total revenue and profit?
A: Total revenue is the total income from sales, while profit is revenue minus all costs and expenses associated with producing and selling the goods or services.
Q2: Can total revenue be negative?
A: No, total revenue cannot be negative since both price and quantity are non-negative values. A negative revenue would indicate an error in calculation or data entry.
Q3: How does price elasticity affect total revenue?
A: Price elasticity of demand influences how changes in price affect total revenue. For elastic demand, price decreases may increase revenue, while for inelastic demand, price increases may boost revenue.
Q4: Is total revenue the same as sales?
A: Yes, in most business contexts, total revenue refers to total sales revenue before any deductions.
Q5: How frequently should total revenue be calculated?
A: Businesses typically calculate total revenue regularly - daily, weekly, monthly, or quarterly - depending on their reporting needs and business cycle.