Profit

                                                                                             

Profit

Profit is the money that is left after paying all the costs from the revenue earned. Total profit can be calculated as follows.

                                   Total profit= Total Revenue - Total cost

A firm may also make a loss. A loss occurs when the total revenue is less than the total cost.

Average Profit (AP): Average profit refers to the profit earned per unit of output.

                                   Average Profit = Profit

                                                             Output

Exercise: Assume that a product is sold for $550. Fill in the following table.

Output	Total Cost	Total Revenue	Total Profit	Average Profit	Marginal profit
0	1000
1	1350
2	1560
3	1740
4	2000
5	2400
6	3000
7	3850
8	4960