Total Revenue is simply Price times Quantity sold and can also easily be shown as a rectangular area.

   On the graph to the right, the firm is selling Q* units at the market price of P*. The total revenue from this sale is depicted as the shaded area which is simply P* x Q*.

   We learned early on that Profit is simply Total Revenue - Total Costs. This difference can also be shown as a rectangular area.

Copyright © 1995-2004 OnLineTexts.com, Inc. - All Rights Reserved