The price of output multiplied by the quantity of output equals which measure?

• A. Total Revenue
• B. Gross Margin
• C. Net Income
• D. Operating Income

Answer: (A)

Think about revenue as the top-line inflow from sales. The value you get from selling is found by taking the price each unit sells for and multiplying it by how many units are sold. In other words, price per unit times quantity sold equals total revenue. This captures the total amount earned from sales before any costs are subtracted.

To place it in context, gross margin is what you get after subtracting the direct cost of goods sold from revenue, net income is what remains after all expenses, and operating income is earnings from core operations before interest and taxes. For the scenario given, the product of price and quantity directly represents total revenue.