Total revenue is calculated as price times which quantity?

Total revenue is calculated as price times which quantity?

• A. Price x quantity
• B. Cost x quantity
• C. Price x cost
• D. Quantity x rate

Answer: (A)

Total revenue is the money a business gets from selling its goods, so it is calculated by multiplying the price per unit by the number of units sold. For example, selling 200 units at $12 each results in 12 × 200 = $2,400 in revenue. Using cost instead of price would mix revenue with cost, which isn’t the revenue measure. Price × cost doesn’t represent revenue either. And while quantity × rate would equal price × quantity if rate truly equals price, the standard and clearer way to express this in practice is price per unit times quantity sold.

Total revenue is the money a business gets from selling its goods, so it is calculated by multiplying the price per unit by the number of units sold. For example, selling 200 units at $12 each results in 12 × 200 = $2,400 in revenue.

Using cost instead of price would mix revenue with cost, which isn’t the revenue measure. Price × cost doesn’t represent revenue either. And while quantity × rate would equal price × quantity if rate truly equals price, the standard and clearer way to express this in practice is price per unit times quantity sold.