Economic profit:

Question

Economic profit:

Quizplus · Accepted Answer

Economic profit per unit is calculated as the difference between price and the average total cost. Economic profit as a total amount is calculated by subtracting the sum of average variable costs and fixed costs from total revenue. Option A is incorrect because it only takes into account fixed costs and not variable costs. Option C is incorrect because it only considers the difference between price and average variable cost, while option B takes into account all costs.

Economic Profit