Final answer:
Total revenue is calculated by multiplying the product's price by the quantity sold. For 75 units sold at $2.75 each, total revenue is $206.25. The provided scenario shows the business making zero profit since total costs are equal to total revenue.
Step-by-step explanation:
Total revenue is a crucial concept in both economics and business that refers to the total income a firm generates from selling its products or services. To calculate total revenue, one must multiply the price at which the product is sold by the quantity of the product sold. This calculation is represented by the formula: Total Revenue = Price x Quantity.
In the case provided, if a firm sells a product for $2.75 each and sells 75 units of the product, the total revenue can be calculated by multiplying the price of the product by the quantity sold. Therefore, the total revenue is (75 units) x ($2.75 per unit) = $206.25. However, since the provided information also indicates that the total costs equal the total revenue, we can deduce that the firm is making zero profit.
If we were to calculate the effect of sales tax and tip on a given amount, we would add the percentages to the original amount to find the total amount paid. For example, if the original amount is $100, a 4% sales tax would add $4, and a 20% tip would add $20, making the total amount paid $124.