Questions: The total revenue received by sellers of a good is computed by multiplying the price times the quantity sold.

The total revenue received by sellers of a good is computed by multiplying the price times the quantity sold.
Transcript text: The total revenue received by sellers of a good is computed by multiplying the price times the quantity sold.
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Solution

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The answer is the last one: multiplying the price times the quantity sold.

Explanation for each option:

  • Dividing the percentage change in quantity by the percentage change in price: This describes the calculation of price elasticity of demand, not total revenue.

  • Adding the price and the quantity sold: This operation does not make sense in the context of calculating revenue, as price and quantity are different units and cannot be directly added to compute revenue.

  • Multiplying the percentage change in price times the percentage change in quantity: This is not a valid method for calculating total revenue. It might relate to elasticity concepts but not directly to revenue calculation.

  • Multiplying the price times the quantity sold: This is the correct method for calculating total revenue. Total revenue is the product of the price per unit and the number of units sold.

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