A firm's markup is

Question

A firm's markup is

Quizplus · Accepted Answer

Markup is the amount by which price exceeds marginal cost. It represents the additional amount that the firm charges above its production cost in order to make a profit. Option A is not correct because the firm's total profit is the difference between total revenue and total cost, it is not the same as markup. Option B is not correct because the firm's total cost includes both variable and fixed costs, and markup is only related to the variable cost. Option D is not correct because when price equals marginal cost, there is no markup. Option E is the opposite of markup and is not correct.

A Firm's Markup Is