Figure 5-12

-Refer to Figure 5-12.Total revenue when the price is P₁ is represented by the area(s)
A) B + D.
B) A + B.
C) C + D.
D) D.

Question

Figure 5-12
 
-Refer to Figure 5-12.Total revenue when the price is P₁ is represented by the area(s)
A) B + D. 
B) A + B. 
C) C + D. 
D) D.

Quizplus · Accepted Answer

Total revenue is equal to price times quantity. When the price is P₁, the quantity sold is Q₁. The area of rectangle B represents the revenue from selling Q₁ units at price P₁. The area of triangle D represents the additional revenue from selling the last unit at price P₁. Therefore, the total revenue when the price is P₁ is represented by the area of rectangle B plus the area of triangle D, which is choice A.

Figure 5-12 -Refer to Figure 5-12.Total Revenue When the Price Is P₁