Total revenue is calculated by:

Total revenue is calculated by:

• A. Subtracting costs from profits
• B. Dividing units sold by the price
• C. Multiplying units by their respective price
• D. Averaging costs over time

Answer: (C)

Total revenue represents the total amount of money a business earns from selling its goods or services before any costs or expenses are deducted. It is calculated by multiplying the number of units sold by the price at which each unit is sold. This means that if a company sells 100 units of a product at $10 each, the total revenue would be 100 multiplied by 10, which equals $1,000. This straightforward calculation highlights the relationship between sales volume and pricing in determining the revenue generated by a business. The other options do not accurately represent how total revenue is calculated, thereby making them less suitable. For example, subtracting costs from profits does not relate to revenue; rather, it pertains to net income calculations. Dividing units sold by the price confuses the relationship between price and revenue and does not form a correct calculation. Averaging costs over time does not pertain to revenue, as it deals with cost management rather than income generation. Hence, the most accurate method of calculating total revenue is indeed through the multiplication of units sold by their respective price.

Total revenue represents the total amount of money a business earns from selling its goods or services before any costs or expenses are deducted. It is calculated by multiplying the number of units sold by the price at which each unit is sold. This means that if a company sells 100 units of a product at $10 each, the total revenue would be 100 multiplied by 10, which equals $1,000. This straightforward calculation highlights the relationship between sales volume and pricing in determining the revenue generated by a business.

The other options do not accurately represent how total revenue is calculated, thereby making them less suitable. For example, subtracting costs from profits does not relate to revenue; rather, it pertains to net income calculations. Dividing units sold by the price confuses the relationship between price and revenue and does not form a correct calculation. Averaging costs over time does not pertain to revenue, as it deals with cost management rather than income generation. Hence, the most accurate method of calculating total revenue is indeed through the multiplication of units sold by their respective price.