total revenue

Also found in: Acronyms.

Total revenue

Total sales and other revenue for the period shown. Known as "turnover" in the U.K.

Total Revenue

The total amount of a company's sales and other sources of income. It is important to note that revenue is distinct from earnings or profits, which takes expenses into account. Obviously, however, high total revenue is desirable for any company.
Total revenueclick for a larger image
Fig. 187 Total revenue.

total revenue

the aggregate revenue obtained by a FIRM from the sale of a particular quantity of output, equal to price times quantity. Under conditions of PERFECT COMPETITION, the firm faces a horizontal DEMAND CURVE at the going market price. Each extra unit of output sold (MARGINAL REVENUE) adds exactly the same amount to total revenue as previous units. Hence, total revenue is a straight upward sloping line (see Fig. 187 (a) ). Under conditions of imperfect competition (for example, MONOPOLISTIC COMPETITION), the firm faces a downward-sloping demand curve and price has to be lowered in order to sell more units. As price is lowered, each extra unit of output sold (marginal revenue) adds successively smaller amounts to total revenue than previous units. Thus, total revenue rises but at a decreasing rate, and eventually falls (see Fig. 187 ).

Total revenue interacts with TOTAL COST in determining the level of output at which the firm achieves its objective of PROFIT MAXIMIZATION.

References in periodicals archive ?
Similarly with respect to choosing the profit-maximizing amount of labor; over the range of labor for which marginal revenue product exceeds marginal labor cost for a rpm, the hire of additional labor will increase total profit because total revenue will increase more than total cost; over the range of labor for which marginal revenue product is less than marginal labor cost, the hire of less labor will increase total profit.
As a percentage of total revenue, our software license fees are among the highest in the industry," he said.
The reason is that less utilization will likely result in an increased number of contracts, partners, and market share, resulting in increased total revenue.