How are the total revenue of a firm, market price, and the quantity sold by the firm related to each other?

Total revenue is defined as the total sale proceeds of a producer by selling corresponding level of output therefore total revenue can be defined as the total sales proceed of the seller by selling the number of units at a given price.

In a perfectly competitive market the firm is a price taker so it can't influence the price hence it can change its total revenue by changing the quantity of output sold.


TR = P X Q


Where,


TR - Total Revenue


Q - Quantity of Output sold


P - Price


The total revenue curve is give below –



It touches the X-axis because the TR is zero if zero output is sold.


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