Question

Explain why it is
reasonable to say that “total revenue” is the same as
“total expenditures."

Answer 1

Answer:

Total revenue equals total Expenditure in a market where transaction costs are zero. This is because what consumer pays is received in total by the supplier. That is consumers pay price quantity which is total Expenditure. Hence total Expenditure equals total revenue.

Answer 2

It is reasonable to say that “total revenue” is the same as “total expenditures." as the total revenue obtained by the seller from the sale of a quantity of a good equals the buyers' expenditure.

Revenue and Expenditure

• The total amount of income earned by the sale of goods and services connected to the principal operations of the firm is referred to as revenue.
• Expenditure is the payment of money, or any other form of fortune, to another person or group in exchange for an object, service, or other category of costs.
• It is reasonable to say that “total revenue” is the same as “total expenditures." as the total revenue obtained by the seller from the sale of a quantity of a good equals the buyers' expenditure.

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