What equation shows organizations the relationship between price and profit?
A) Total Variable Costs + Total Fixed Costs = Sales − Profit
B) Price = Profit per Item × Number of Units Sold
C) (Price × Quantity Sold) − Total Costs = Profits
D) (Price − Profits) × Total Costs = Sales
E) Total Costs = (Price × Quantity Sold) − Profits

Question

Quizplus · Accepted Answer

The equation (Price × Quantity Sold) − Total Costs = Profits shows the relationship between the price and profit of an organization. It indicates that the profit of the organization is the difference between the revenue generated by selling the product at a given price and the total costs incurred in producing and selling the product. This equation highlights the need for organizations to carefully balance the price they charge for their products with the costs they incur in order to achieve a profitable outcome.

What Equation Shows Organizations the Relationship Between Price and Profit