Understanding the Total Revenue Curve
The Total Revenue (TR) curve graphically represents how a firm's total earnings change with its production output.
Total Revenue is the total amount of money a firm receives from selling its goods or services. It is calculated as the price per unit multiplied by the quantity sold. Mathematically, this is represented as:
$TR = P \times Q$
Where:
- $TR$ = Total Revenue
- $P$ = Price per unit
- $Q$ = Quantity of output sold
The Total Revenue Curve specifically plots the values of total revenue ($TR$) on the vertical axis against different levels of output ($Q$) on the horizontal axis. Therefore, the curve shows the relationship between the total revenue generated by the firm and the level of output it produces.
Looking at the options provided:
- Quarterly revenue and semi-annual revenue are specific time-based measures, not the general concept plotted.
- Investment relates to capital spending, not sales revenue.
- Total revenue accurately describes what is plotted against output on the TR curve.
Thus, the blank in the question should be filled with 'total revenue'.
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