The amount of money that a firm recieves from the sales of its output is called

Step 1: Analyze the question The question asks for the term describing the total money a firm receives from selling its output.

Step 2: Explain the concept

• Total revenue (TR) is the entire income a firm earns from selling its goods or services. Formula: TR = Price × Quantity sold (P × Q)
• Total cost (TC) is the total expenditure a firm incurs in producing its output.
• Total profit is what remains after costs are subtracted: Profit = TR − TC
• Average revenue (AR) is revenue per unit sold: AR = TR ÷ Q, which equals the price.

Step 3: Solution Check each option against the definition:

• A. Total profit: this is revenue minus cost, not the money received. ❌
• B. Total revenue: this is the full amount received from sales. ✅
• C. Total cost: this is money spent, not received. ❌
• D. Average revenue: this is revenue per unit, not the total amount. ❌

Step 4: Answer The correct option is B. total revenue.

Step 5: Exam tip Remember the word "revenue" as "money coming in." If a question says received from sales, think revenue. If it says spent on production, think cost. If it says what is left over, think profit.