What is the definition of total revenue in the context of demand?

Total revenue is defined as the total amount of money that a firm receives from selling its goods or services within a specific period. This definition highlights the relationship between price and quantity sold, as total revenue is calculated by multiplying the price per unit by the number of units sold.

In the context of demand, understanding total revenue is crucial because it helps firms evaluate how changes in price might affect sales volume and, ultimately, revenues. When a firm alters its pricing strategy, it can see varying impacts on total revenue, which can guide future pricing and production decisions.

Other definitions listed do not accurately capture the essence of total revenue in the demand context. For instance, the difference between the price of a good and its production cost speaks more to profit margins rather than revenue itself. The willingness to pay addresses consumer behavior but does not reflect the actual monetary inflow to the firm. Lastly, profit after expenses is related to net income, which is derived after considering costs, thus introducing a whole different financial metric. The focus here remains strictly on the income generated from sales, which solidifies option B as the correct definition of total revenue.