Competitive firm and its total revenue curve
Total revenue (TR) is equal to price (P) times the quantity (Q):
TR = PQ
Under perfect competition the firm is a price taker. The price is therefore given and the firm's total revenue (TR) increases by a constant amount for each additional unit sold. For instance, the total revenue of 2 units is equal to 2 x R20 = R40, the total revenue for 3 units is 3 x R20 = R60, the total revenue for 4 units is 4 x R20 = R80 and so on.