Final answer:
The correct formula to determine total revenue for a firm is Total Revenue = Price x Quantity.
Step-by-step explanation:
To determine the total revenue for a firm using Monte Carlo simulation, or any other economic analysis, the correct formula to use is:
Total Revenue = Price x Quantity
This formula calculates the income a firm generates from selling its products by multiplying the price at which the products are sold by the total quantity sold. The combinations of price and quantity, which can be stochastic inputs in a Monte Carlo simulation, reflect different scenarios on the demand curve that may occur in the market. Total revenue does not account for the cost of goods or the firm's expenses; it simply reflects sales income.