Why is the total revenue curve of a price-taking firm an upward-sloping straight line? Why does the curve pass through the origin?

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.


The total revenue curve of a price taking firm is upward sloping straight line because in perfectly competitive market the firm is a price taker and so the price or average revenue is constant. Due to this the total revenue increases proportionately with increase in the quantity of output sold. Total revenue curve passes through origin because if quantity of output sold is zero then total revenue will also be zero.



4