What is calculated by multiplying price and quantity sold?

The calculation of sales revenue is achieved by multiplying the price of a product by the quantity sold. This formula reflects the total income generated from sales before any deductions, such as costs or expenses. Sales revenue is a critical measure for businesses as it indicates the effectiveness of their pricing strategy and sales efforts.

Understanding this concept also highlights the difference between sales revenue and other financial terms. Profit is calculated by subtracting costs from sales revenue, while loss represents a negative profit situation. Market share, on the other hand, is a measure of a company’s sales as a percentage of the overall market, not directly related to the simple calculation of multiplying price by quantity sold. Hence, multiplying price by quantity sold specifically leads to sales revenue, establishing why this choice is the correct answer.