Total revenue (TR) is the total amount of money a business earns from selling its goods or services. It is calculated by multiplying the price of a product by the quantity sold.

Formula: TR = Price × Quantity (P × Q)

Key relationships include:

• Marginal Revenue: Total revenue is the sum of all marginal revenues generated from each unit sold.
• Perfect competition: In this market, total revenue increases at a steady, linear rate because the price remains constant.
• Imperfect competition: Total revenue rises at first, but begins to fall later because the business must lower prices to sell more units.
• Profit calculation: Revenue curves are essential for calculating profit, where Profit = Total Revenue (TR) − Total Costs (TC).

Note: Total revenue reaches its maximum point when marginal revenue is equal to zero.