Which statement about total revenue is correct?
Select ONE answer:
- It is always equal to total cost.
- It is always equivalent to profit.
- It is maximised when the price elasticity of demand is inelastic.
- It is price multiplied by the quantity sold.
Show your workings to arrive at your answer, and explain and justify your reasons:……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
This multiple choice question is suitable for Economics KS5 classes.
The answer is 4
- Costs and revenue are determined separately. Costs may be less than, equal to or greater than revenue.
- Total revenue is not the equivalent of profit
- Total revenue is maximised when price elasticity of demand = -1
- Correct: Total revenue of a firm = the price of each unit times the number of units sold.
This work is licensed under a Creative Commons Attribution 4.0 International License.
