Total revenue is how much money a business makes from everything it sells. If you have a lemonade stand and you sell each cup for $2, and you sell 50 cups, then your total revenue is $2 times 50, which is $100.
Calculator
Formula
Total Revenue = Average Price x Quantity Sold
How to Calculate Total Revenue – step by step
Step 1 – Find the average price per item. This is how much you sell each thing for (e.g., each cup of lemonade).
Step 2 – Find out how many items you sold. This is the total number of things you sold.
Step 3 – Multiply the price by the number of items sold to find your total revenue.
Example
If a toy store sells 100 toys at $10 each:
Step 1: Price per toy = $10.
Step 2: Number of toys sold = 100.
Step 3: Total revenue = $10 × 100 = $1,000.
Result: The total revenue is $1,000. This is how much money the store made from selling the toys.
Definition – What is Total Revenue?
Total revenue is all the money a business makes from selling its goods or services. It’s found by multiplying the price of the item by how many items are sold.
Marginal Revenue vs. Total Revenue
Total revenue is all the money a business gets from all its sales.
Marginal revenue is the extra money a business gets from selling one more item.
Average Revenue vs. Total Revenue
Average revenue is how much money, on average, each item brings in. Sometimes, it’s just the price per item.
Total Cost vs. Total Revenue
Total Cost are the total expenses going out of a business.
Cost and Revenue work together to make profit. If revenue is higher than cost, a profit is made. If cost is higher than revenue, a loss happens.
Table
Total revenue table
| Average Revenue (Price) | Quantity Sold | Total Revenue |
| $1 | 100 | $100 |
| $1 | 1,000 | $1,000 |
| $10 | 100 | $1,000 |
| $10 | 1,000 | $10,000 |
| $100 | 100 | $10,000 |
| $100 | 1,000 | $100,000 |
| $500 | 1,000 | $500,000 |
| $500 | 5,000 | $2,500,000 |
| $1,000 | 1,000 | $1,000,000 |
| $1,000 | 10,000 | $10,000,000 |
FAQs
Q: What happens to total revenue if the price goes down but the number of items sold goes up?
A: Total revenue can still go up if the increase in the number of items sold is big enough to make up for the lower price.
Q: Is total revenue the same as profit?
A: No, total revenue is all the money you make from selling stuff, but profit is what’s left after you pay all your costs.
Q: Can total revenue be negative?
A: No, because total revenue is just the money you make from sales. It can be zero if you don’t sell anything, but it can’t be negative.
Q: Is total revenue always higher if you sell more items?
A: Not always. If you have to lower the price of all items a lot to sell more, total revenue could stay the same, go up, or even go down. However, if the price drop only happens to the extra items sold, then total revenue would go up.
Sources and resources
- Khan Academy. (n.d.-d). https://www.khanacademy.org/economics-finance-domain/microeconomics/elasticity-tutorial/price-elasticity-tutorial/v/total-revenue-and-elasticity
- Wikipedia contributors. (2024b, June 20). Total revenue. Wikipedia. https://en.wikipedia.org/wiki/Total_revenue
- Kacapyr, E., & Redelsheimer, J., & Musgrave, F. Barron’s AP Microeconomics / Macroeconomics (6th ed.). (2018). United States of America: Barron’s. ISBN: 978-1-4380-1065-6. Page 67.
- Pindyck, R., & Rubinfeld, D., Microeconomics (8th ed.), (2013). United States of America: Pearson. ISBN 13: 978-0-13-285712-3. Page 284.
- Nicholson, W., & Snyder, C. Microeconomic Theory – Basic Principles and Extensions (10th ed.). (2008). United States of America: Thomas South-Western. ISBN 13: 978-0-324-42162-0. Page 324.
- Greenlaw, S., & Shapiro, D., Principles of Microeconomics 2e. (2018). Houston: Rice University OpenStax. ISBN 13: 978-1-947172-35-7. Page 117.